Forex Flash: GBP expected to stay heavy following BoE – UBS

FXstreet.com (Barcelona) - According to Research Analyst Gareth Berry at UBS, “The Bank of England decision today is not expected to yield any surprises as the dovish camp will have difficulty in overturning the majority in favor of keeping the APF unchanged in size.”

For now it is probably difficult to find UK-specific factors to drive sterling, but we would note that changes in policy rate expectations should still be monitored. In particular, with EONIA movements earlier in Q1, near the zero-bound slight changes will have an impact. “As such, so long as MPC members do not rule out cuts as an option, we expect GBP to stay heavy.” Berry adds.