As the financial markets await BoE Governor Andrew Bailey’s speech in Jackson Hole today, experts predict that he may follow Powell’s approach of saying as little as possible. While the UK does not have aggressively dovish pricing like the US, there is still a need for more confidence in inflation, according to ING’s FX strategist Francesco Pesole.
Potential Rebound in GBP: Is 0.8550-0.8600 on the Horizon?
Recent remarks from BoE policymakers, including hawkish comments from Catherine Mann and Chief Economist Huw Pill, have highlighted concerns about structural wage-price inflation. With the EUR/GBP pair dipping below 0.8500 due to growth differentials between the eurozone and the UK, there is caution about further downward movement given the rate-spread outlook. Despite this, experts are predicting a potential rebound to 0.8550-0.8600 in the coming weeks.
Analysis:
Andrew Bailey’s speech at Jackson Hole could impact the GBP’s performance in the near future. Investors should pay close attention to any hints about inflation and interest rate policies, as these factors can influence currency movements. Keep an eye on the EUR/GBP pair for potential trading opportunities based on the rate-spread dynamics between the eurozone and the UK.