GBP/USD to test 1.24 with continued weakness below this mark a possibility – Scotiabank
Markets await next week’s Bank of England (BoE) decision. Economists at Scotiabank expect GBP losses to resume to below 1.24.
A firm and longer-lasting drop under 1.25 seems likely
“The bank is likely to hike by 25bps but it looks set to accompany this with a cautious economic outlook and implicit guidance that market pricing seeing 150bps in hikes by year-end is significantly out of line – as this would result in a notable undershoot in inflation.
“There’s very little possible upside for the GBP from this meeting and considerable downside as the bank strikes a much more neutral to even dovish tone than markets are reflecting in rate bets.”
“A firm and longer-lasting drop under 1.25 seems likely and with it a test of 1.24 with continued weakness below this mark also a possibility.”
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FXStreet Insights Team
FXStreet
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