GBP/USD could drop to the 1.2580/1.2600 area – ING

The Bank of England is set to announce its Interest Rate Decision and release a new Monetary Policy Report (MPR) at 11:00 GMT. Economists at ING analyze how the announcement could impact the British Pound (GBP).

Some downside risks to Sterling

A slightly risk-off environment and our baseline call of the BoE only hiking 25 bps could be a mild negative for Sterling – especially were the BoE to go further than the Fed in acknowledging the process of disinflation. 

For Cable that means an outside risk of a drop to the 1.2580/1.2600 area (depending on the Dollar environment), while EUR/GBP could be correcting back to the 0.8640 area.

See – BoE Preview: Forecasts from 10 major banks, 25 bps or 50 bps? That is the question