BoE To Disappoint On Rate Hikes?
As we bring the week to a close, HSBC have published their currency forecast for 2022, with the Pound the surprise package to deliver less than inspiring results and dropping off against both the Euro and US Dollar.
With markets now pivoting to a December rate hike following the strong labour market data and above-consensus UK inflation numbers released this past week, this in turn has seen a big pick up in Sterling but HSBC have warned, the UK central bank could disappoint on the expected rates rises in either December or February, thus leading to sell-off in the pound heading into the final months of 2021.
In level terms, EUR/USD opens this morning at the midpoint of 1.13-1.14, with the GBP/EUR starting today just below the 1.19 threshold and Cable (GBP/USD) also operating just below the 1.35 mark.
Datawise today, a sparse data schedule once again in the US and Eurozone. However, a number of key central bankers from the ECB, the Fed and the BoE are due to make prepared remarks, including ECB President Lagarde.