Economists at ING delve into the potential effects of the Bank of England (BoE) meeting on the Pound Sterling (GBP).
Stability in Forward Guidance Expected to Support Pound
It is anticipated that the BoE will maintain its forward guidance in today’s meeting. Assuming that the voting pattern within the Monetary Policy Committee (MPC) remains consistent with that of February—2 (voting for a hike), 6 (advocating for no change), and 1 (suggesting a cut)—we anticipate a positive stance for GBP/USD. This could potentially drive the currency pair towards resistance levels within the range of 1.2850 to 1.2900. The likelihood of a shift from a hike to an unchanged position among the voting members is not anticipated to exert significant pressure on the Pound.
In such a scenario, it is speculated that EUR/GBP may revisit the significant support level at 0.8500. However, our analysis maintains that this level should serve as a medium-term foundation, and we foresee EUR/GBP gradually ascending throughout the year, particularly as the BoE unveils its plans for easing in the coming months.
