FxWirePro: GBP looks stronger against INR; add longs on July GBPINR futures

Sterling rebounded well back again from two-week lows against the dollar yesterday, after a softer-than-expected U.S. jobs report weighed on the greenback while a robust survey on UK construction sector underpinned the pound.

The Greek referendum scheduled for Sunday leaves the near-term outlook for risky and EM assets uncertain. The developments in Greece have induced some volatility into EM assets over the past week, particularly in the CEE region.

Earlier in the day, better-than-projected British construction data helped the pound. At 58.1 points versus a forecast 56.5, the PMI survey showed construction activity in Britain grew at its fastest rate in four months in June, and confidence in the sector surged to an 11-year high after a lull in the run-up to May's national election.

That was reflective of a UK economy that continues to outstrip its peers in Europe on the back of robust domestic demand and putting rises in interest rates back on the table for the end of this year.

We project GBPINR is likely to trade on healthier on the back of stronger than expected economic data from the UK. On a trading basis we recommend buying near month futures for a targets around 99.80 levels on a short term basis.