FX commentary from Credit Agricole ahead of the BOE decision on Thursday:

Cable is up 90 pips to 1.5317 today and EUR/GBP is down 68 pips to 0.7335.

"With rates markets now pricing in a lift-off around August 2016, chances are that the upcoming UK data releases and BoE rhetoric could encourage investors to front load rate hike expectations.

Tomorrow's BoE meeting and policy minutes could signal that a growing number of MPC members have considered voting for a rate hike, consistent with recent more hawkish comments by Forbes and Weale.

In addition, the fact that the UK CA deficit dropped sharply in Q2 while GBP TWI continued to lose ground hitting a fourmonth low recently. This could help ease some of the concerns at the MPC about the impact from FX appreciation.

We stay in favour of buying GBP dips."

Credit Agricole maintains a short EUR/GBP from 0.7313, with a stop at 0.7500, and a target at 0.7000.

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