The pound is facing a rate hike for the first time since the crisis. And the big question is: what’s next? Here is the view from ING:
Here is their view, courtesy of eFXnews:
ING FX Strategy Research discusses GBP/USD outlook ahead of the BoE November policy meeting on Thursday.
“BoE officials will need to give the illusion that this is more than a one-and-done policy move to nip their currency-related inflationary concerns in the bud. We expect them to be successful in doing so, with the signal of a ‘gradual’ tightening cycle retaining an element of policy flexibility – while steepening the UK rate curve a bit.
Yet, we’re aware that the big picture focus for GBP remains Brexit – and we expect there to be some focus on a parliamentary testimony by Brexit Secretary David Davis on the economic implications of a ‘No Deal’.
An optimistic GBP outlook does require having bold faith in politicians to follow the economically rational path of a mutual divorce agreement with a status-quo transitional period until trade talks are over,” ING argues.
“With the ‘Carney Put’ in place, we are more comfortable in enlisting such faith in politicians and retain a constructive GBP outlook (GBP/USD 1-month target 1.35),” ING concludes.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.Get the 5 most predictable currency pairs