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- EUR/GBP to trade near 0.83 through the first half of 2022 – ING
EUR/GBP to trade near 0.83 through the first half of 2022 – ING
The Bank of England (BoE) is expected to hike its policy rate by 25 basis points later in the session. Economists at ING expect the pound to remain resilient throughout the first half of the year. Subsequently, the EUR/GBP pair is set to hover around the 0.83 level.
Another 25bp from the BoE
“The BoE is widely expected to hike the Bank Rate to 0.75%. The market prices the Bank Rate close to 2.25%, yes 2.25%, by the end of this year. GBP pricing will be driven by when the BoE feels the need to disabuse the market of this notion. There are many thinking that this will come today and have probably positioned for a GBP sell-off.”
“Should the BoE continue to prefer a strong GBP to insulate against higher natural gas prices and the run-up in CPI to 8% this April, it could choose to delay a rate protest until later in the year.”
“Our preference is for GBP holding gains through the first half of this year – and EUR/GBP continuing to trade near 0.83. If we are wrong and the rate protest comes today, EUR/GBP could spike to the 0.8480/8500 area.”
See – BoE Preview: Forecasts from 10 major banks, eyeing a hat-trick caught between a rock and a hard place
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