GBP unlikely to get directional cues from the BoE next week – TDS

Analysts at TD Securities do not think the March MPC meeting of BoE will provide sterling with a major directional cue.

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“With the ongoing drama over Brexit building to a peak, traditional FX market drivers are likely to remain a distant concern for global investors, at least for now. Our expectation that policymakers will walk a very careful line in the current political environment only reinforces the view that the BoE will stay behind its ramparts for now.”

“The run up to Thursday’s MPC meeting will be dominated by the third “Meaningful Vote” (MV3) in Parliament on the Withdrawal Agreement. This is currently slated for Tuesday, March 19. With this in mind, we think cable may remain volatile, but within broadly familiar ranges until more clarity emerges on the political front.”

“We continue to think sterling will remain volatile, but generally range-bound ahead of the MV3 vote. We cannot dismiss a slight peek above this week’s intraday high just below 1.34 in cable if the headline flow turns more positive. We do not, however, think that move will be sustained. Instead, we think near-term risks are tilting toward a move back toward 1.30 as political tensions intensify.”