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10 Feb 2015
Sterling to benefit from ECB’s QE - Nomura
FXStreet (Bali) - GBP should benefit the most from the ECB's QE, among European G10 FX, according to Nomura Research Analysts.
Key Quotes
"After the ECB's decision to embark on the QE, we believe euro area investors' portfolio rebalancing will be important investment theme for the FX market this year."
"As the UK yield level is more attractive, the UK economy is likely to attract more fixed income investment flows from the euro area than other European G10 economies."
"In fact, even before the ECB’s decision, foreign debt inflows into the UK economy had already accelerated, making it easier for the UK economy to absorb its widening current account deficits."
"During the euro area crisis, UK monetary policy worked against attracting foreign flows which were shifting from the euro area, but now the monetary policy situation is very different."
"GBP should benefit the most from the ECB's QE, among European G10 FX, in our view. We expect EUR/GBP to reach 0.72 by end-2015 and the main risk to this bullish GBP view for now remains the upcoming UK election."
Key Quotes
"After the ECB's decision to embark on the QE, we believe euro area investors' portfolio rebalancing will be important investment theme for the FX market this year."
"As the UK yield level is more attractive, the UK economy is likely to attract more fixed income investment flows from the euro area than other European G10 economies."
"In fact, even before the ECB’s decision, foreign debt inflows into the UK economy had already accelerated, making it easier for the UK economy to absorb its widening current account deficits."
"During the euro area crisis, UK monetary policy worked against attracting foreign flows which were shifting from the euro area, but now the monetary policy situation is very different."
"GBP should benefit the most from the ECB's QE, among European G10 FX, in our view. We expect EUR/GBP to reach 0.72 by end-2015 and the main risk to this bullish GBP view for now remains the upcoming UK election."