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Dec 02 - 11:55 AM

GBP/USD - COMMENT-Sterling's Reprieve May Be Short-Lived If BoE Disappoints Again

By Paul Spirgel  —  Dec 02 - 09:35 AM

Sterling led major currencies higher versus the dollar on Thursday, rising 0.37% to 1.3321, reversing most of Wednesday's late, Omicron-related, risk-off drubbing to 1.3263, with the pound seen well placed to weather uncertainties so long as the BoE remains on course to hike rates.

But, the BoE will have to deliver its Dec.
16 meeting after balking at the MPC policy gathering in November.

Relatively speaking the pound has held up well, falling just 2.6% versus the dollar in 2021, better than low-for-longer EUR and JPY, down 7.2% and 9.2% respectively.
Sterling has risen 4.7% versus the euro and 7.1% against the yen.

Since the BoE wrong-footed markets by holding rates steady on Nov.
4, keeping then, expectations for a hike in December have fallen from 100% for a 25bp increase to 50% for a 15bp move BOEWATCH.

Another disappointment by the BoE on rates would extend the pound's weakness versus the dollar, potentially below the Nov.
30 flash low at 1.3195, while undermining its performance against the euro and yen.

For more click on FXBUZ


GBP Perf vs USD, Majors: Click here

GB Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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