The MPC meeting of the Bank of England this Thursday may not cause an important reassessment of the relaxation cycle rhythm, says Chris Turner, an Ing FX analyst.
EUR/GBP could be more comfortable in the 0.8650-0.8700 area
“If that is the case, we doubt that the EUR/GBP needs to get too far from the area of 0.8700. Likewise, there could be a positive surprise for the pound if the BOE announced that a lower pace of quantitative hardening – for example, 75,000 million pounds per year instead of 100,000 million – would be accompanied by less sales of gilts in the longer term. That could relieve some pressure in the furthest end of curve and be seen as something positive for the sovereign risk of the United Kingdom. “
“We tend to think that EUR/GBP would be more comfortable in the area of 0.8650-0.8700 this week.”
Source: Fx Street
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