After the Bank of England (BOE) refrained from mentioning negative interest rates as a policy option at its last week’s monetary policy meeting, the money markets pushed back the odds of the UK interest rates turning negative next year, per Reuters.
The money markets now see the BOE cutting rates sub-zero in June 2021 vs. the previous expectations of negative rates in May 2021, courtesy of the optimism over the COVID-19 vaccine and expectations of a Brexit breakthrough.
Market reaction
The pound emerges as the top performer across the fx board so far this Tuesday, in the wake of the upbeat UK jobs report and deferred negative rates expectations.
At the press time, GBP/USD rises 0.62% to trade at 1.3247, flirting with fresh two-month tops of 1.3256.
Share
