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11 Jun 2013
Flash: GBP/USD gyrations explained – RBS
FXstreet.com (New York) - The focus for FX markets last week remained very much on the gyrations in the US Treasury market and moves in the USD/JPY.
According to the RBS Research Team, “Fears of tighter liquidity added fuel on a already more brightly burning complacency fire. A covering of short USD positions was seen and this largely drove the move higher in GBP/USD. The rise outpaced the move in rate spreads.”
Moreover, the BoE MPC meeting which saw unchanged policy, as unanimously expected, certainly didn’t drive the gains in GBP/USD. With no accompanying statement and the minutes not published until 19th June, we learned very little. The next couple of meetings will be more interesting than the June vintage.
According to the RBS Research Team, “Fears of tighter liquidity added fuel on a already more brightly burning complacency fire. A covering of short USD positions was seen and this largely drove the move higher in GBP/USD. The rise outpaced the move in rate spreads.”
Moreover, the BoE MPC meeting which saw unchanged policy, as unanimously expected, certainly didn’t drive the gains in GBP/USD. With no accompanying statement and the minutes not published until 19th June, we learned very little. The next couple of meetings will be more interesting than the June vintage.