EUR/GBP: Bringing Forward BoE Hike Call; Lowering EUR/GBP Targets - Danske



Danske Research discusses the reaction to today's BoE policy meeting in which MPC voted to maintain the Bank Rate at 0.50% and the stock of purchased assets financed by the issuance of central bank reserves at £435 billion.
"Based on the hawkish signal from the BoE, we now expect the bank to hike the Bank Rate to 0.75% as early as May (previously February 2019). As this seems like the beginning of a hiking cycle, the BoE is likely to hike again in November.  In the short term, we see little room for higher rates but believe the curve will steepen substantially further out.
This has strengthened the case for a lower EUR/GBP. We now expect EUR/GBP at 0.87 in 3M (previously 0.88), 0.86 in 6M (0.87) and 0.84 in 12M (0.86)," Danske projects. 

Comments