EUR/GBP: Risk-Reward Favors Longs Here; GBP/USD: Topping Out Below 1.35

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The currency to buy the Euro against is the Pound, at last for today. MPC Governor Mark Carney survived his brush wit the Treasury Select Committee largely unscathed and was pretty clear that further easing is possible. We’ve priced in good data and if I look at relative real yields for the UK vs. Germany, they are absurdly low in the UK on any historical comparison.

I’m told (regularly) to hold my horses on my desire to sell gilts, but in the meantime, I still think GBP/USD is topping out below 1.35 and I think long EUR/GBP is a decent risk-reward trade here.


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