Next week, the Bank of England will have its monetary policy meeting. Analysts at MUFG Bank consider it poses some upside risk for the pound but they warn any rally should be short-lived in light of the still unfavourable UK cyclical backdrop.
Key Quotes:
“The GBP has been consolidating at weaker levels after correcting lower in April and May. It has seen cable fluctuate around the 1.2500-level since late April while EUR/GBP has been trading just above the 0.8500-level over the same period. The recent pick-up in UK political uncertainty after Prime Boris Johnson faced and narrowly survived a vote of no confidence in parliament at the start of this week had only a limited and fleeting impact on GBP performance.”
“The weak outlook for UK growth combined with elevated inflation continues to be a negative mix for GBP performance, and is making it more difficult for the BoE to set monetary policy. We expect the BoE to continue tightening policy in the week ahead in response to the risk that elevated inflation could become more embedded without policy action.”
“We believe next week’s MPC meeting poses some upside risk for the GBP, but any rally should be short-lived in light of the still unfavourable UK cyclical backdrop.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Next on the upside comes 0.6690
AUD/USD rapidly left behind Friday’s pronounced decline and regained strong impulse on Monday, surpassing the 0.6500 barrier with certain conviction and reaching new peaks around 0.6550. The move higher in spot was propped up by extra losses in the US Dollar and a generalised risk-on mood.
EUR/USD keeps the bid bias in place
EUR/USD surpassed the 1.1600 barrier once again, although it failed to extend the move further north in quite a firm start to the week. The renewed weakness around the Greenback allowed spot and the risk complex in general to regain composure and leave behind the recent drop.
Gold slips back to daily lows, looks at $3,380
Gold keeps its offered stance on Monday, and is now drifting lower to the area of daily troughs around $3,380 per troy ounce against the backdrop of persistent risk-on sentiment and shrinking effervescence in the Middle East. Furthermore, the tepid bounce in US yields across the board also contributes to the decline in the precious metal.
Ripple Price Prediction: XRP flaunts potential breakout to $3.00 on surging risk appetite
Ripple (XRP) flaunts a short-term bullish outlook as part of the recovery from the sell-off encountered last week after Israel launched attacks on Iran, escalating geopolitical tensions in the Middle East.
Chinese data suggests economy on track to hit 2025 growth target
China's May data was mixed with strong retail sales, but soft readings on fixed-asset investment and property price. Overall, though, data suggests that China remains on track to achieve its growth target in the first half of 2025.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.