After falling on Carney’s dovishness and rising on his newly found hawkishness, the pound will face Carney once again, this time at the “Super Thursday” meeting on August 3rd. What can we expect?
Here is their view, courtesy of eFXnews:
CIBC FX Strategy Research notes that the August 3rd BoE policy meeting will again manifest divergent opinions in a split MPC vote.
“However, with external member Kristin Forbes being replaced by the seemingly more dovish Silvana Tenreyro, only two clear hawks remain on the committee.
Notwithstanding Chief Economist Andy Haldane’s comments about potentially voting for a hike before the end of the year, we judge that markets are placing too high a probability on tightening. Haldane’s suggestion came with a clear rider that data would have to come in broadly as expected, but we see risks on that front as skewed to the downside,” CIBC adds.
As a result, CIBC argues that GBP/USD isn’t likely to recover much further over the next six months expecting the pair to stay capped under 1.30 through year-end.
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