UK rate pricing is heading into recession-inducing Subsequently, Sterling is set to suffer, Kit Juckes, Chief Global FX Strategist at Société Générale, reports.
Sterling’s last hurrah?
“Jeremy Hunt, the UKL’s Chancellor told Sky News that ‘It’s not a trade-off between tackling inflation and recession, in the end the only path to sustainable growth is to bring down inflation’ as he expressed support for tighter monetary policy even if the economy suffers.”
“If the K does raise rates by another 1%, as is priced by markets, and all that talk of long and variable lags between monetary policy implementation and when it takes effect on the economy are ignored, yet again, recession seems certain. How high will Sterling climb from here before it starts falling? Given how much is priced into the curve, this is surely the last leg of the GBP rally.”
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.
Follow us on Telegram
Stay updated of all the news
AUD/USD grinds above 0.6500 on hawkish RBA’s Lowe ahead of China PMI, Aussie inflation
AUD/USD picks up bids to pare the previous day’s losses around 0.6520, after snapping a two-day uptrend, as Reserve Bank of Australia (RBA) Governor Philip Lowe sounds hawkish on early Wednesday in Asia.
EUR/USD holds firm above 1.0700 Premium
EUR/USD managed to hold on to its recovery from monthly lows, hovering around 1.0730 ahead of the Asian session. The US Dollar is having a mixed performance amid cautious markets, as investors await news on the debt limit drama.
Gold juggles around $1,960 after a rally inspired by US Dollar’s correction
Gold price has turned sideways around $1,960.00 after failing to extend a rally above $1,963.70 in the early Asian session. A quick rally in the Gold price came after a vertical sell-off in the US Dollar Index (DXY).
CFTC warns of product range expansion risks as the securities offering debate continues
The United States Commodities Futures Trading Commission (CFTC) released a staff advisory letter on May 30, addressing registered derivatives clearing organizations (DCOs) and DCO applicants.
US: Confidence shaken amid early tremors in job market
Consumer confidence slipped slightly in May, and while the weakening may reflect short-term worries about the debt ceiling, the more interesting developments reveal how the sand is shifting under consumers' feet.