The Pound is set to underperform – MUFG
|The BoE’s policy update triggered a modest initial sell-off for the Pound. Economists at MUFG Bank analyze GBP outlook.
GBP to weaken further
The updated policy messages from the Fed and BoE were both similar in our view signalling it was more likely that no further hikes would be required but not going as far as completely ruling it out. The developments support our outlook for the Pound to weaken further.
The UK rate market is currently pricing in around 55 bps of cuts by the end of next year. We still expect the BoE to deliver more cuts next year than currently priced.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.