FXStreet (Edinburgh) – Currency Analyst at BTMU Lee Hardman, sees the likeliness of the cross to test the 0.67 area towards the end of 2015.
Key Quotes
“The FT has reported hawkish comments from MPC member Weale stating that the BoE should be ready to begin raising rates as early as in August highlighting that he likely to soon re-instated his vote for a rate hike”.
“Downward pressure on inflation from the fall in oil and food prices is now coming to an end, which is prompting more concern about the recent pick up in wage growth which was described as “a bit faster” than he expected last autumn”.
“Given that MPC member Weale is at the most hawkish spectrum of the MPC having voted for a rate hike between August and December of last year, his updated views are unlikely to materially change the market’s outlook for the first BoE rate hike to be delivered by around the middle of next year”.
“Nevertheless it could provide the first sign that the debate on the MPC is beginning to take a more hawkish tone given the pick-up in wage growth which should continue to provide support for the pound especially against the euro heading into year end”.
“It is consistent with our view that EUR/GBP is likely to soon break below the 0.7000-level and move towards the 0.6700-level by year end”.
(Market News Provided by FXstreet)