The pound got a beating on Brexit worries and the implications of a weak pound on consumption. Will the BOE respond? What does it mean for EUR/GBP?
Here is their view, courtesy of eFXnews:
Danske Bank does not expect Bank of England (BoE) to make any policy changes at its March meeting this week.
“We expect BoE to maintain the Bank Rate at 0.25%, while leaving the targets for the stock of government bond purchases (APF) and the stock of corporate bond purchases (CBPS) unchanged at GBP435bn and GBP10bn, respectively. We do not expect any changes to the Term Funding Scheme (TFS) either.
Moreover, Danske still expects the BoE to remain on hold for the next 12 months.
On the FX front, Danske notes that as EUR/GBP has reached o1-3M target of 0.87, they’re are currently reviewing their forecast.
“We still see risks skewed to the upside for EUR/GBP in the coming months ahead of and after the triggering of Article 50,” Danske projects.
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