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19 May 2014
GBP, mildly negative - RBS
FXStreet (Guatemala) - Strategists at RBS explained that the BoE Governor Carney made it clear that monetary policy is the last line of defence to combat imbalances in the housing market, and on the margin that is mildly GBP negative.
Key Quotes:
“Tighter macro-prudential policy would suggest less need to tighten conventional policy (i.e. interest rates)”.
“Still, for the GBP, strength in near-term indicators has largely out-shined a still-dovish BoE narrative".
"The softer than expected labour report last week may put an increased emphasis on the consensus dovish slant by the BoE, one we anticipate will be largely confirmed in the MPC minutes”.
“With disinflation the focus globally, currencies have become very sensitive to even small misses on inflation”.
Key Quotes:
“Tighter macro-prudential policy would suggest less need to tighten conventional policy (i.e. interest rates)”.
“Still, for the GBP, strength in near-term indicators has largely out-shined a still-dovish BoE narrative".
"The softer than expected labour report last week may put an increased emphasis on the consensus dovish slant by the BoE, one we anticipate will be largely confirmed in the MPC minutes”.
“With disinflation the focus globally, currencies have become very sensitive to even small misses on inflation”.