Mitsubishi UFJ is still playing the pound higher, based on a cluster of positive elements, in particular a quasi-advanced speech from the Bank of England. The BoE has openly hinted at the start of a rate tightening cycle as early as next year, while other central banks are busy convincing investors that they are not even considering the start of the smallest turn of the screw. "These comments have positioned the BoE in the minds of market participants as one of the first G10 central banks to start raising rates, alongside the Bank of Norway, the Bank of China and the Bank of New Zealand," says FX specialist Lee Hardman.
Going long on cable will be all the more interesting if economic data from the UK continues to surprise positively. Retail sales and spending in general are up sharply. So much so that the BoE's forecast for Q2 growth of 4.3% now looks fairly conservative," Hardman adds. The only thing to watch out for is a possible pandemic recovery fueled by the new mutation of the coronavirus. But for now, investors are assuming that the vaccination will limit any further disruption to the UK economy, in a country where 75% of the population has received one dose and half a second.
Currency cross-tabulation as of June 8, 2021