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Forex pairs in this Article » EUR/GBP (Guatemala) - Jane Foley, Senior Currency Strategist for Rabobank International explained that since the end of last year, UK money rate rates have softened a little.

Key Quotes:

“The tone of UK economic data recently, while still decent, has disappointed market expectations. Perhaps the market’s expectations regarding the UK recovery were becoming a little too optimistic? Market positioning suggests that sterling could be vulnerable in the coming weeks if the Bank chooses to underpin a dovish policy position”.

“Next week the minutes of the January MPC meeting are due. It is possible that these could contain a discussion which could lay the groundwork for a change in the Bank’s forward guidance. The Quarterly Inflation Report will be presented on February 12”.

“Based on the risk that the BoE will reinforce its dovish tone, we expect that sterling could suffer a setback in the coming weeks. That said, in view of the better economic data in the UK relative to the Eurozone, we still expect EUR/GBP to end the year moderately lower in the 0.81 region”.
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