BoE has a balanced approach to Brexit risks – Westpac

Sandeep Kanihama FXStreet Contributor

Tim Riddell, Research Analyst at Westpac, notes that this week’s parliamentary grilling of Carney and other MPC members left the market with the impression that the BoE has a balanced approach to Brexit risks, though Chief Economist Haldane continued to voice a negative bias to their forecasts.

Key Quotes

“Debating of Article 50 bill is progressing smoothly for May’s government and should drift from market attention until the 8 March budget.”

“The next two weeks should see a series of hints and leaks of the budget’s content. Although the OBR has warned against a loosening of fiscal policy, the better than anticipated path for this year’s deficit (had been forecast to be close to 2015-16 deficit of over GBP70bn) should allow for positive news.”

“If CBI trends reflect recent lower retail sales, GBP should be capped, but the BoE’s stance and the likelihood of a prudent budget should provide a firm base and see GBP strengthen within its recent ranges (GBP/USD 1.20-1.28, EUR/GBP 0.8850-0.8175).”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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