GBP/USD: A move to 1.12 is possible if BoE only hikes 50 bps – Credit Suisse GBPUSD BOE InterestRate Banks
rate decision. If it reverts to type with only a 50 bps rate hike, the pound has a long way to fall, economists at Credit Suisse report.“It’s still possible that the BoE now reverts to type, arguing that it prefers to remain conservative until it has a clear sense of what the new fiscal stance will be. If this results in only a 50 bps rate hike, GBP has a long way to fall, with a move to 1.1200 possible on the day.
“Even if the BoE does deliver a 75 bps hike, we retain a suspicion that it will offset that with a dovish tone in terms of the scale of future hikes. If so, we can imagine the terminal rate moving lower towards 4.50%, which again would leave GBP with insufficient rate premium to be attractive given the UK’s fragile balance of paymentsInformation on these pages contains forward-looking statements that involve risks and uncertainties.
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