Morgan Stanley on the Bank of England - one of the more hawkish of central banks - GBP implications

Author: Eamonn Sheridan | Category: Central Banks

Comments from Morgan Stanley on the Bank of England and GBP, via eFX.

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  • We maintain a bullish skew on GBP and expect it to outperform on the crosses against currencies with less hawkish central banks, like SEK. 
  • Recent comments from Bank of England policymakers were on the hawkish side, with Governor Bailey saying the committee was evenly split on whether the minimum conditions for a rate hike had been met at the August meeting
  • The BoE should thus remain one of the more hawkish G10 central banks, with the focus being on the evolution of the labour market into the autumn
  • GBP/USD should however remain largely driven by the broader USD trajectory and may be more rangebound given our bullish USD view
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