Prons:
1. The last CFTC Commercial (Banks) report shows 5,850 long and 23,571 short for EUR/GBP X-rate, which is 4:1 ratio for sell EUR and buy GBP,
2. Preliminary CPI for Eurozone is not yet as good as expected, so the price for Euro now is not appropriate. Core CPI is still subdued, but Mr. Market buy Euro now because of assumption that there is a possibility in the future to make a change in the monetary policy for Eurozone. Mr. Market thinks there is a possibility that ECB tone will be more hawkish (or less dovish) in the future,
3. GBP in longterm is under fair value, so in the longer period of time we can expect GBP to go up,
4. The inflation in UK is picking up quite fast.
Cons:
1. The inflation of Eurozone is picking up but slowly,
2. Political uncertainty in UK - UK gov. elections,
3. Negotiations in case of Brexit, between UK and EU can drive uncertainty for GBP,
4. The UK government may want to have a low pound to prop up the property sector which in the UK is one of the most important sectors.
Presented Idea is only an assumption, one of many possibilities which can happen.
Always invest consicously. The price can do anything at any time.
1. The last CFTC Commercial (Banks) report shows 5,850 long and 23,571 short for EUR/GBP X-rate, which is 4:1 ratio for sell EUR and buy GBP,
2. Preliminary CPI for Eurozone is not yet as good as expected, so the price for Euro now is not appropriate. Core CPI is still subdued, but Mr. Market buy Euro now because of assumption that there is a possibility in the future to make a change in the monetary policy for Eurozone. Mr. Market thinks there is a possibility that ECB tone will be more hawkish (or less dovish) in the future,
3. GBP in longterm is under fair value, so in the longer period of time we can expect GBP to go up,
4. The inflation in UK is picking up quite fast.
Cons:
1. The inflation of Eurozone is picking up but slowly,
2. Political uncertainty in UK - UK gov. elections,
3. Negotiations in case of Brexit, between UK and EU can drive uncertainty for GBP,
4. The UK government may want to have a low pound to prop up the property sector which in the UK is one of the most important sectors.
Presented Idea is only an assumption, one of many possibilities which can happen.
Always invest consicously. The price can do anything at any time.