GBP: Don't expect much from Bailey – ING
|Bank of England (BoE) Governor Andrew Bailey speaks today in Jackson Hole (1600) and we think he may emulate Powell’s approach in saying as little as possible. Bailey does not have to deal with aggressively dovish pricing (-39bp by year-end), but the UK still needs to gain much more confidence on the inflation front, ING’s FX strategist Francesco Pesole notes.
A rebound to 0.8550-0.8600 remains highly likely
“August has not really seen many remarks from BoE policymakers: the latest ones were from a hawk, Catherine Mann, who once again emphasised the risks of structural wage-price inflation. Before then, it was Chief Economist Huw Pill who spoke on 2 August and said the BoE shouldn’t be promising rate cuts in the very short term.”
“There is a good chance Bailey’s speech will be a non-event for sterling. EUR/GBP has returned below 0.8500 on the back of eurozone-UK growth differentials, but we remain wary of chasing the pair lower given the rate-spread picture. A rebound to 0.8550-0.8600 remains our call for the coming weeks.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.