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Oct 19 - 09:55 AM

GBP: Market Pricing In More Front Loaded BoE Rate Hikes But Sticking To Bearish Cable View Into Year-End - MUFG

By eFXdata  —  Oct 19 - 08:35 AM

MUFG Research discusses GBP outlook and maintains a bearish bias into year-end.

"The UK rate market moved to price in more front loaded rate hikes from the BoE following the hawkish comments from Governor Bailey over the weekend," MUFG notes. 

"However, we are still sticking to our view that the GBP is more likely to weaken heading into year end given the more challenging backdrop of slowing global growth, higher inflation and tightening liquidity conditions which should be less supportive for risk assets and high beta currencies like the pound. More front-loaded BoE tightening could also be viewed as more of a policy mistake if the UK economy slows more notably heading into year end triggering a weaker pound," MUFG adds. 

Source:
MUFG Research/Market Commentary

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