Sterling to benefit if UK inflation data once again surprises on the upside – Commerzbank GBPUSD BOE Inflation InterestRate Banks
As the inflation data due for publication tomorrow will illustrate, getting inflation under control will be the more pressing problem right now. If the data once again surprises on the upside speculation about a 50 bps rate hike might intensify, which would probably benefit Sterling.
However, we principally remain cautious as the rate expectations for the rest of the year seem excessive and we see the risk of the market having to correct its expectations. Short-term rate speculation might support Sterling, but medium-term we expect Sterling to be weaker.Information on these pages contains forward-looking statements that involve risks and uncertainties.
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