GBP: Under pressure? – Danske Bank

Sandeep Kanihama FXStreet Contributor

Analysts at Danske Bank points out that GBP was sold off yesterday on reports that UK PM Theresa May could lose the vote in the House of Commons on a pro-European EU custom union amendment.

Key Quotes

“May survived the vote last night, but GBP remained weak, with EUR/GBP trading around 0.8880 overnight. Yesterday's sell-off in GBP came despite the release of a decent UK job report, which came in as expected and thus still supports the case for a rate hike from the Bank of England in August.”

“However, the market is already pricing in more than an 80% probability that the BoE will raise the Bank Rate on 2 August, and thus relative interest rates should provide only little support to GBP ahead of the BoE meeting. Hence, risks remain skewed to the upside for EUR/GBP near term amid political uncertainty related to Brexit.”

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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