23 Jan 2014
Flash: GBP could strengthen further - Danske Bank
FXstreet.com (Barcelona) - Danske Bank Strategists would not be surprised to see further GBP strength today.
Key Quotes
“GBP appreciated strongly yesterday as the unemployment rate dropped to 7.1%, very close to the 7.0% threshold monitored by the Bank of England (BoE). As the unemployment rate in the UK has fallen rapidly (0.7pp in only five months) the BoE’s forward guidance framework and
7% threshold are under great pressure.”
“Furthermore, the Minutes did not indicate that the BoE has any plans of lowering the 7% threshold. We believe that the money market will continue to bring forward the timing of the first rate hike in the UK, adding further support to GBP.”
Key Quotes
“GBP appreciated strongly yesterday as the unemployment rate dropped to 7.1%, very close to the 7.0% threshold monitored by the Bank of England (BoE). As the unemployment rate in the UK has fallen rapidly (0.7pp in only five months) the BoE’s forward guidance framework and
7% threshold are under great pressure.”
“Furthermore, the Minutes did not indicate that the BoE has any plans of lowering the 7% threshold. We believe that the money market will continue to bring forward the timing of the first rate hike in the UK, adding further support to GBP.”