Broker ING noted a potential downside risk for the British pound, noting the currency’s recent decline from its peak against the euro. As a factor contributing to its changes, it was highlighted that the British pound is sensitive to the behavior of American stocks.
The company has also seen a decline in volatility in the pair as the market awaits the release of key UK Consumer Price Index (CPI) data scheduled for next week.
British economist ING suggests that expectations regarding the monetary policy of the Bank of England (BoE) may become dovish. The company maintains a positive outlook on the EUR/GBP pair’s upside potential as market participants may raise their bets on a potential BoE rate cut in June.
British financial markets focused attention on the speech of Catherine Mann from the BoE, considered the most hawkish member of the Monetary Policy Committee (MPC).
The development follows comments from Megan Greene, who recently shared cautious optimism on inflation, echoing sentiments expressed by BoE Governor Andrew Bailey at the last meeting.
ING’s comment comes at a time when investors and analysts are closely monitoring the central bank’s moves, which may significantly affect currency valuations. Waiting for UK CPI data and the potential BoE response are key factors in the company’s analysis of GBP’s trajectory.
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