Home Business NewsBusiness Sterling rises against the euro in three-week high ahead of BoE interest rate meeting

Sterling rises against the euro in three-week high ahead of BoE interest rate meeting

11th Sep 17 1:43 pm

Here’s what you need to know

Monday, the pound rose against the euro ahead of Bank of England’s (BoE) rate setting monetary policy committee meeting (MPC), on Thursday.

The pound to euro rate rose by 0.25 per cent, this brings gains of 0.66 per cent of the last week however, sterling is still 6.3 per cent offside against the euro.

Thursday’s meeting could yield a major re-pricing of the pound’s value against the euro, according to strategists at TD Securities.

Analysts are expecting the MPC to keep the current interest rate of 0.25 per cent, despite the expected discussion on raising rates.

Investors are speculating on the BoE, possibly, having a more hawkish policy, hawkish means that a central bank or central bankers are intent withdrawing stimulus or raising interest rates.

James Rossiter, a London-based foreign exchange strategist at TD Securities, said: “An unexpectedly hawkish outcome risks a major repricing… This leaves EURGBP exposed to significant positioning risks.

“Cable (GBP/USD) could surge to fresh post-Brexit highs in the weeks ahead amid a broadly weaker USD.”

Paresh Davdra, chief executive and co-founder of RationalFX, said: “Analysts believe that fears over the weak pound’s effect on inflation could help to increase the chances of more hawkish sentiment from the bank.

“However, Brexit uncertainty continues to cloud the pound’s outlook. Investors will be looking to see if the pound can escape political pressures over the coming days to hold onto its gains as the BoE’s meeting approaches.”

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