The pound remains on the back foot after the British government hardly survived the votes in parliament. How will the BOE affect it?
Here is their view, courtesy of eFXdata:
MUFG Research discusses GBP outlook around the BoE June policy meeting on Thursday.
“The latest Brexit developments have largely overshadowed tomorrow’s BoE policy meeting. The BoE is expected to leave policy unchanged as expected, but that does not mean it will be a non-event for the pound.
It remains to be seen whether the pick-up in growth in Q2 is sufficient for the BoE to hike rates in August. Tomorrow’s policy update could provide an important insight. If the BoE gives the green light to an August hike, the pound could regain some upward momentum.
In contrast it would remain vulnerable to further weakness in the near-term if no clear signal is provided. We have been pencilling in a hike for August although acknowledge it is a close call,” MUFG argues.
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