Bank of England out with a hawkish hike

John Hardy

Head of FX Strategy, Saxo Bank Group
John Hardy joined Saxo in 2002 and has been Head of FX Strategy since October 2007. He focuses on delivering strategies and analyses in the currency market as defined by fundamentals, changes in macroeconomic themes, and technical developments.

The Bank of England has come out with a more hawkish hike than expected. As forecasted, the BoE hiked the policy rate by 25 basis points. It also offered slightly more hawkish language in the guidance than was perhaps expected.

As well, the Monetary Policy Committee voted 9-0 versus perhaps 7-2 or even 8-1 expected, also somewhat hawkish at the margin. Sterling is a bit firmer in response, with EURGBP off a bit toward the lows of the day (the big zone there is 0.8800-25). The interest rate reaction suggests that this was no shocker, however, and we'll have to have a look at the Carney press conference up shortly for further spin.

On the margin, this is sterling bullish so far... 

Potentially holding back sterling traders from committing risk at the moment is the prospect of Prime Minister May's meeting with French president Macron tomorrow, as signaling from Macron will be closely scrutinised in the wake of that meeting for signs that his stance on Brexit is thawing, something that has been detected from German chancellor Merkel recently.

Access both platforms from your single Saxo account.

Disclaimer

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice or a personal recommendation and does not take into consideration your objectives, financial situation and needs. Saxo Capital Markets UK Limited will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information. We assume no liability for errors, inaccuracies or omissions contained within these materials.

It is important that you understand that with investments, your capital is at risk. We offer leveraged products which carry risk and can result in losses that exceed deposits. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more here.

Additional Key Information Documents are available in our trading platform.

Saxo Capital Markets UK is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871

Please read our full disclaimer - https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer