TD Securities: GBP Rally Against EUR, USD Unlikely to Last
TD Securities sees limited upside for the British pound against the euro and dollar, citing a cautious Bank of England stance beyond the recent hawkish vote split.
The British pound briefly strengthened against the euro and the US dollar on Wednesday after the Bank of England’s Monetary Policy Committee voted 6-3 to leave rates unchanged. The split included Catherine Mann joining the hike camp, which initially pushed GBP/USD 0.3% higher.
However, according to TD Securities FX strategist Howard Du, the rally is unlikely to be sustained. The majority of the committee appears content to keep rates on hold given limited second-round inflation effects, signaling a less hawkish path ahead.
As a result, the strategist sees the recent GBP strength as a temporary move, with the pound expected to retreat against both the EUR and the USD.
Source: FXStreet Forex News