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Aug 03 - 06:55 PM

AUD, GBP: The Aussie Is A Long-Term Winner, Sterling Isn’t - Where To Target? - SocGen

By eFXdata  —  Aug 03 - 03:00 PM

Societe Generale Research targets AUD/USD at 0.72 and GBP/USD at 1.18 by end of Q3.

"Of the growth-sensitive currencies, the one we like most on a long-term basis, is the AUD. It has been held back for years by a mix of tight fiscal and easy monetary policy, possible because of the lack of inflationary pressure. A world with less disinflation is a world where the AUD should trade significantly higher than it does today," SocGen notes. 

"At the other extreme, we remain wary of sterling. The fact that bearing bearish is very consensual does help it, and higher rates will continue to provide support, but political uncertainty, a balance of payments crisis and plentiful downside growth risks will weigh on the pound once rates have peaked. EUR/GBP may be able to edge slowly higher even against the backdrop of a weak euro," SocGen adds. 

Source:
Société Générale Research/Market Commentary

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