Via Bloomberg
I was pondering the path of the GBP going into the UK elections when I came across a post on Bloomberg by Mark Cranfield which I thought was worth sharing with readers. Mark made a case for GBPJPY to head lower on the following rationale:
1. Bank of Japan holding policy steady and keeping their further QE powder dry will encourage yen buyers again
2. GBP to remain pressured/upside limited with investors remembering the uncertainties of the 2017 election and 2016 referendum. Political outcomes are tricky to call.
3. Options skew has shifted in favour of a lower GBPJPY despite the recent climb for the spot rate and the JPY could also benefit from a rate pause.
Ok, makes sense. After the Fed have met and the BoJ have cleared their meeting then I could see a case for GBPJPY sellers on pullbacks. What are your guys thinking on the GBP and the impact of the UK election?
