**Pound Sterling Rebounds after BoE Decision, but Downside Risks Remain**
The Pound Sterling (GBP) saw a modest recovery following the Bank of England’s decision to keep interest rates unchanged. However, the outlook for the currency remains cautious. According to ING’s FX analyst, Chris Turner, BoE Governor Andrew Bailey has emerged as a potential swing voter who is now leaning toward a rate cut in December.
Turner notes, “Sterling is enjoying a modest recovery after the Bank of England left rates unchanged yesterday. However, it now seems Governor Andrew Bailey is the swing voter and minded for a December cut. That outcome is only priced with a 70% probability right now, meaning that there is scope for lower short-term rates and a weaker pound.”
The market currently sees a 70% chance of a rate cut next month, which leaves room for further downside risk for GBP. If this scenario materializes, short-term interest rates could fall, putting additional pressure on the Pound.
Turner also highlights a key technical level for the currency pair EUR/GBP, suggesting: “Expect EUR/GBP to find good support if it gets anywhere near the 0.8760 area, and we would expect it to be trading above 0.88 heading into the Budget later this month.”
In summary, while the Pound has rebounded from the BoE’s steady stance, traders and investors should remain cautious given the increased likelihood of a rate cut and its potential impact on the currency.
https://bitcoinethereumnews.com/finance/december-boe-rate-cut-looks-underpriced-ing/