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GBP Avoiding The Flak For Now; How To Trade It? – Credit Suisse

The currency with the best complexion over the past week has been the GBP, notes Credit Suisse.

"We think this makes sense given it has the fewest uncertainties to cope with at this exact time. Any outflows from the euro area due to Greek / European periphery risk have tended to find a home in GBP-denominated assets in recent years," CS adds.

"With the UK’s EU referendum issue still at earliest a 2016 story, and more likely a 2017 one, there is no obvious reason to avoid GBP longs at this point in time (our work suggests markets only start pricing such risks six months before the actual event)," CS argues.

"Players who want to be short EUR or commodity currencies can do so against the GBP by buying a currency that trades closely in line with the greenback when European risks rise but without taking the USD-specific Fed risk that lies ahead," CS advises.

"We like trades like long GBPAUD as a structural position, a pair that is making new multi-year highs and where the AUD leg has problems of its own including a risk of an RBA rate cut as soon as August," CS clarifies.

'This content has been provided under specific arrangement with eFXnews.'



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