Paul Tudor Jones sees potential market rally after late October
Investing.com -- The British GBP/USD is facing a busy week with several key economic events that could impact its value.
The highlight of the week will be Thursday’s Bank of England Monetary Policy Committee (MPC) meeting. Before that, employment and earnings figures will be released Tuesday, followed by August CPI data on Wednesday.
ING analysts suggest that unless there is an unexpected drop in employment, wages, or services inflation, the Bank of England will likely maintain the hawkish stance it introduced at its August MPC meeting.
This approach has resonated with investors, who are currently pricing in only 8 basis points of rate cuts this year and a total of 40 basis points by next summer.
The divergence between UK inflation and that of the eurozone and US is described as "quite rare" by ING.
The bank’s analysts believe UK price data is now more crucial than activity data in determining when the BoE will proceed with the next phase of its easing cycle.
Despite challenges faced by the UK Labour government, appetite for the high-yielding pound remains strong. ING expects EUR/GBP to stay within its 0.86-0.87 range, while GBP/USD could potentially break above resistance at 1.3590/3600 this week if the Federal Reserve adopts a sufficiently dovish tone.