Today the Bank of England left interest rate unchanged as expected. According to analysts from Danske Bank, the pound is likely to remain volatile and sensitive to Brexit headlines.
Key Quotes:
“EUR/GBP is little changed as the 9-0 vote for an unchanged Bank Rate was widely expected. The UK money market curve is relatively flat, with the next BoE rate hike priced to arrive in November 2019. While this is slightly dovish compared to our call for a hike in May 2019, we think pricing is fair for now – especially given the uncertainty related to Brexit.”
“We expect GBP to remain very volatile and sensitive to Brexit news in coming months and, overall, we still see EUR/GBP risks skewed to the upside ahead of the UK Conservative party’s annual congress, due to start on 30 September.”
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