GBP now looks to the BoE – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen noted the recent developments from the Bank of England and their effects on the Sterling.

Key Quotes

“Elsewhere in FX markets, Bank of England board members have set the GBP tone over the last few sessions”.

“On Tuesday, Governor Mark Carney’s comments sent EUR/GBP higher but yesterday saw the cross erase most of its gains as prominent BoE board member Andrew G. Haldane – who did not dissent at the last meeting – interestingly said he now openly favours a rate hike in H2”.

“Even if the two sets of speeches do not necessarily contradict each other, it does on the surface suggest an increasingly split board on how to look at the latest uptick in inflation”.

“With a divided board, each board member potentially becomes more pivotal and hence our call for a BoE on hold throughout the Brexit negotiations is increasingly becoming at risk”.