BoE back in play should be supportive - Nomura

Analysts at Nomura explained that trading GBP with a medium-term view has been painful. 

Key Quotes:

"The price action has been lower in recent weeks, with only three notable days where it fell (UK election and BoEinspired events) but the days in between showing small but consistent inclines so the flow is perhaps not all one way. We expected the hung parliament to lead to a pricing of less austerity and softer Brexit hopes, but thanks to the mixed BoE communication both have failed to materially lift the pound."

"However, with Andrew Haldane’s more hawkish comments today we may have witnessed a game-changer in the BoE’s MPC. GBP/USD dipped below the post-election 1.2650 level that we highlighted as a good level to buy GBP."

"When we started writing this note (before Andrew Haldane’s comments) we were perplexed by the overreaction in FX and rates after Mark Carney’s Mansion House speech and expected some pull-back higher in the FX as a result. But given that we would classify Andrew Haldane as one of the more dovish members of the MPC, it is hard not to expect market hopes of a hike to rise once again. We therefore remain long GBP and advise taking advantage of these low levels."