Limited room for the GBP to weaken much further from here – HSBC GBPUSD BOE Fed ECB Banks
on 3 August, with GBP/USD breaking below 1.27. Beyond the knee-jerk reaction, excessive downside in the GBP may be limited from here, in the view of economists at HSBC.In August, the BoE hiked its policy rate by 25 bps to 5.25%, the highest in 15 years. The nine-member MPC split three ways on the decision, while a tightening bias remains in place.
All this suggests the BoE retains a modest tightening bias, especially compared to US Federal Reserve and the European Central Bank which both stressed more explicitly that further rate hikes will depend on data. These hawkish elements below the surface of this BoE decision may limit excessive downside in the GBP from here.Information on these pages contains forward-looking statements that involve risks and uncertainties.
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