In our preview of the Bank of England, we suggested that the recent rise may trigger a sell-off as the news comes out. Here is a similar view from TD:
Here is their view, courtesy of eFXnews:
TD FX Strategy Research discusses GBP outlook ahead of the BoE November policy meeting on Thursday.
“We expect the Bank of England to hike Bank Rate by 25bps tomorrow; this will be the MPC’s first rate hike in over 10 years. The vote is likely to be 7-2 in favour of a hike (with Ramsden dissenting, alongside one of Cunliffe or Tenreyro), though we see risks of an 8-1 or 6-3 outcome,” TD projects.
“Recent gains leave GBP vulnerable to a pullback unless the MPC sends further hawkish signals through the vote or guidance on future rate path.
Our base case suggests a “sell-the-fact” reaction is likely for sterling, but a surprisingly hawkish outcome would extend its rally until focus turns to the next round of Brexit negotiations (9 Nov),” TD argues.
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