EUR/USD continues its climb higher - Nomura

Analysts at Nomura noted the recent developments in the FX space, focusing on the EUR, GBP and the cross. 

Key Quotes:

"GBP suffers after BoE The dollar broadly weakened, with EUR/USD touching 1.19 this week. 

Dollar sentiment remains negative, and the data did little to improve the picture with today’s US nonmanufacturing ISM declining to 53.9 and ADP employment number coming a little below consensus ahead of tomorrow’s employment report. EUR/GBP has broken through the 90 level following the BoE meeting. 

The outcome turned out to be the market’s central case of the BoE on hold, and the price action suggests this has clearly disappointed the market. 

In coming weeks we expect the MPC to continue to try to convince the market to price in more hikes, and we keep the November meeting live as the earliest possible opportunity for a hike, but for the next few trading sessions, until typical mid-month data releases, we think market sentiment is unlikely to turn around materially. 

We have exited our long GBP (vs EUR and USD) recommendation and wait for better re-entry levels on the USD side. 

However, EUR/GBP may continue to outperform in the near term, because the ECB remains on a path to policy normalisation."