FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ notes GBP remaining weaker after the BoE QIR supported delayed rate hike expectations.

Key Quotes

“The pound has remained on a weaker footing following the release yesterday of the more dovish than expected Quarterly Inflation Report from the BoE. The QIR supported market expectations that the BoE is unlikely to begin raising rates until late next year, which were described as “appropriate”.”

“The BoE lowered substantially their outlook for inflation in the near-term although remains comfortable that it will return to target by the very end of their forecast horizon.”

“Cable is likely to remain under downward pressure as the BoE is now more likely to follow rather than lead the Fed in raising rates from next year.”

“However the pound is still likely to strengthen further against the euro and yen as the BoE remains on track to raise rates well ahead of both the ECB and BoJ, and economic growth in the UK should continue to outperform compared to in the euro-zone.”