FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, expects the GBP to extend its bullish momentum.

Key Quotes

"The pound continues to strengthen in the near-term with EUR/GBP falling back below the 0.8100-level. The package of easing measures unveiled by the ECB has served to reinforce the pound’s upward momentum."

"An unusually wide divergence in monetary policy is expected to open up in the years ahead between the ECB and BoE as the ECB has signalled that it is unlikely to begin raising rates until at least late 2016/2017 while the BoE is expected to begin raising rates from early next year. Those expectations were reinforced further by comments from MPC member McCafferty who stated that the decision over whether to raise rates is “becoming more balanced” but the UK economy can still “grow a little further” before the first rate increase."

"The timing of the first rate increase will “depend critically” on how the economy performs over the summer and autumn. We continue to expect EUR/GBP to fall towards the 0.7500-level in the year ahead."

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