By Areena FxAfter the recent dovish stance from the Bank of England (BoE), the Pound Sterling (GBP) is stabilizing at slightly lower levels. ING economists have examined the GBP outlook and provided insights into the potential movement of the EUR/GBP currency pair.
BoE’s Dovish Turn:
Last Thursday, the BoE issued a dovish statement and minutes, signaling a shift in monetary policy. Governor Andrew Bailey’s interview in the Financial Times on Friday further reinforced this stance, hinting at multiple rate cuts throughout the year. This dovish shift by the BoE solidifies the EUR/GBP’s support level around 0.8500. As a result, the currency pair is anticipated to gradually move towards the 0.8700 area in the coming month.
Expectations for GBP/USD:
Despite the bearish sentiment towards the pound, ING is not overly pessimistic about GBP/USD. They anticipate decent demand to emerge for the currency pair under the 1.2600 level.
Conclusion:
In conclusion, ING’s analysis suggests that the EUR/GBP pair is likely to see a slow upward movement towards 0.8700 due to the BoE’s dovish stance. Traders should monitor developments closely to capitalize on potential trading opportunities in the forex market.