22 Aug 2013
Flash: GBP/USD weaker following MPC comments - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the pound is trading on a weaker footing today following comments from MPC member Weale in an interview with the Daily Telegraph stating that he sees “circumstances in which it would be sensible to undertake further asset purchases”.
Key Quotes
“Those circumstances may include further euro area shocks, and more turmoil in emerging markets. Weale also rejected the market’s view that he is a hawk noting that wage pressures have come down quite a lot and that it is “perfectly possible” the UK’s economic recovery will lose steam.”
“The pound’s recent gains remain vulnerable to a correction in market expectations over the timing of the first BoE rate hike.”
“We expect the BoE to push back strongly soon against the recent rise in UK short rates
since its forward rate guidance was introduced.”
“The focus in Europe today will be the release of the euro-zone PMI surveys for August which are expected to reveal that the economic recovery is likely gathering upward momentum which should help to support the euro in the near-term.”
Key Quotes
“Those circumstances may include further euro area shocks, and more turmoil in emerging markets. Weale also rejected the market’s view that he is a hawk noting that wage pressures have come down quite a lot and that it is “perfectly possible” the UK’s economic recovery will lose steam.”
“The pound’s recent gains remain vulnerable to a correction in market expectations over the timing of the first BoE rate hike.”
“We expect the BoE to push back strongly soon against the recent rise in UK short rates
since its forward rate guidance was introduced.”
“The focus in Europe today will be the release of the euro-zone PMI surveys for August which are expected to reveal that the economic recovery is likely gathering upward momentum which should help to support the euro in the near-term.”