Investors following tactical strategies should consider selling GBP/USD this week, advises Deutsche Bank in its weekly FX pick to clients.
“The domestic growth cycle is now probably in the price, with expectations for 2014 growth forecasts revised up substantially and the market now pricing three BoE hikes by July next year. However, there are risks that Q2 GDP may surprise to the downside after this week’s soft manufacturing and construction output numbers,” DB says as a rationale behind this call.
“Market positioning remains stretched (see chart),” DB adds.
