Bank of England speech is key to pound sterling (GBP) strength

GBP / USD Analysis and News

  • Focus on BoE speech in the light of aggressive Hawkish bets
  • Tenreyro & Mann is usually dovish

Main highlights of GBP Traders will participate in future speeches from BoE officials in light of the aggressive tightening of UK interest rates. The interest rate market seems pretty decisive that the BoE will tighten its policy this year, but it’s still debated whether to trigger with traders who haven’t heard from more dovish members of the Commission. There is room for. The following weekend commentary emphasized that some officials are becoming more concerned about the surge in inflation.

  • Governor Bailey: Concerned that inflation is above target. Inflation expectations need to be prevented from being embedded. There are big and unnecessary price changes.
  • BoE Sanders (most Hawkish): Market pricing is appropriate for early rises in bank rates. The market was fully priced with a rate hike in February and was half priced in December. In addition, widespread labor shortages pose a greater risk of inflation by leading to higher wage demand. (Saunders was interested in the rate setters suggesting that the first move could be 25bps instead of 15bps)

The first comment from a typical dovish Tenreiro this morning was that it would be self-defeating for interest rate setters to raise interest rates to counter price increases, while inflation should be temporary. Repeatedly, he leaned towards a more cautious side. Surprisingly, these comments, which do not exactly support the imminent rate hike, were significantly shrugged by the pound. That said, you can expect BoE’s Mann to contact you from 15:40 BST. This is another official leaning towards a slightly more cautious side. Therefore, if there is a rebound against recent market prices, the pound may see a retreat from its recent highs.

BoE Hawk / Dove Meter

Source: Refinitiv

GBP / USD: Good bi-directional pricing action on the cable as the morning lift above 1.37 drops slightly. Still, the topside resistance of 137.50 is the focus of the bull. in the meantime, EUR / GBP Not enough to print a fresh YTD low, but the path with the least resistance looks low, below 0.8450.

GBP/U.S. dollar Price chart: Daily time frame

Bank of England speech is key to pound sterling (GBP) strength

Source: Refinitiv

Bank of England speech is key to pound sterling (GBP) strength

Source link Bank of England speech is key to pound sterling (GBP) strength

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