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Oct 18 - 09:55 AM

GBP/USD: Market Ahead Of Itself In Pricing BoE Hikes; Downside Risks From This Week's UK Data - Credit Agricole

By eFXdata  —  Oct 18 - 09:00 AM

Credit Agricole CIB Research maintains a bearish bias on GBP over the coming weeks.

"We think that the UK rates markets have gone well ahead of themselves pricing in future BoE tightening and doubt that the MPC will be able to meet the rather hawkish market rate expectations. A likely moderation of the BoE rate expectations could represent an important downside risk for the GBP," CACIB notes. 

"This week, focus will be on UK CPI, retail sales and PMI data. Potential downside surprises from the activity indicators could more than outweigh any evidence of stronger-than-expected acceleration of cost-push inflation. Growing stagflation fears could in turn weigh on the GBP," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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