GBP: December BoE rate cut looks underpriced – ING
|Pound Sterling (GBP) has bounced after the BoE’s steady decision, but with Governor Bailey leaning toward a December cut, downside risks for GBP remain, ING's FX analyst Chris Turner notes.
BoE hold lifts GBP
"Sterling is enjoying a modest recovery after the Bank of England left rates unchanged yesterday. However, it now seems Governor Andrew Bailey is the swing voter and minded for a December cut. That outcome is only priced with a 70% probability right now, meaning that there is scope for lower short-term rates and a weaker pound."
"Expect EUR/GBP to find good support if it gets anywhere near the 0.8760 area, and we would expect it to be trading above 0.88 heading into the Budget later this month."
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