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GBP Strength To Remain, EUR Fundamentally Weak

ByAlen Proff
Published 05/28/2015, 09:02 AM
Updated 07/09/2023, 06:32 AM

Yesterday we had comments that Greece and its creditors may be close to a deal, but these claims were contradicted by other sources, which said a final deal has not been made.
Asian session PCE reading from Australia was worse than expected ( -4.4%). GBP/AUD rallied 220 pips. Analysts from some banks are suggesting that the RBA will cut again this year.

Overview:

USD is the strongest currency in the longer term, short term sentiment is bullish. Friday's CPI with other positive data has confirmed USD strength.
AUD has bearish sentiment after bad Capex data. RBA may consider further cuts this year.
GBP is looking at a rate hike in the next 12 months and also has bullish sentiment. This strength is expected to remain.
EUR is fundamentally weak because of QE and Greek debt issue. If Greece fails to make their repayments, euro will be pressured further.
JPY is bearish because of QQE and USD strenghth. This move is expected to continue.
NZD has a chance of decreasing interest rates in coming months. Overnight Index Swap is pricing a 51% chance of a June 11 cut, while NZIER expects RBNZ to remain on hold.

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