The Bank of England (BoE) is widely expected to cut rates by 25bp today, bringing the policy rate to 4.75%, ING’s FX Analyst Chris Turner notes.
Governor Andrew Bailey's press conference may impact GBP
“Most expect the vote count to prove 8-1 in favour of a cut, although the Pound Sterling (GBP) could quite easily receive a temporary boost if the vote is 7-2 or 6-3. More impactful for GBP, however, should be Governor Andrew Bailey's press conference. He's likely to be asked how stimulative he finds last week's UK budget.”
“Recall that the budget helped the market re-price the BoE easing cycle higher by some 25bp. And we think the market's pricing of the BoE lending rate at above 4.00% next year is too high. We think the BoE will cut more than that. We therefore think there is downside risk to UK rates and GBP today if Bailey downplays the significance of the UK budget to the BoE easing cycle.”
“That means EUR/GBP could enjoy a temporary spike back to the 0.8370/8400 area. Medium term, however, we increasingly expect EUR/GBP to prove a 0.82/83 story as the fall-out of trade wars weighs more heavily on the euro than the GBP.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends recovery toward 1.0800 as USD retreats ahead of Fed
EUR/USD continues to push higher toward 1.0800 on Thursday. The pair finds support from a broad US Dollar retreat, as traders unwind their Trump win-inspired USD longs ahead of the Federal Reserve's highly-anticipated policy announcements.
GBP/USD rebounds above 1.2950 after BoE policy announcements
GBP/USD trades in positive territory above 1.2950 on Thursday. The Bank of England (BoE) lowered the policy rate by 25 basis points as expected but the upward revision to inflation projections helped the pair edge higher. Market focus now shifts to the Fed's policy decisions.
Gold rebounds above $2,680, awaits Fed rate decision
Gold recovers following Wednesday's sharp decline and trades above $2,680. The benchmark 10-year US Treasury bond yield edges lower after Trump-inspired upsurge, allowing XAU/USD to hold its ground ahead of the Fed policy decisions.
Federal Reserve expected to deliver 25 bps interest-rate cut, shrugging off Trump victory
The Federal Reserve is widely expected to lower the policy rate after Donald Trump won the US presidential election. Fed Chairman Powell’s remarks could provide important clues about the rate outlook.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.