EUR/GBP remains at risk of giving back the rebound from the July low (0.6930) amid the deviating paths for monetary policy.
Chart - Created Using FXCM Marketscope 2.0
Expectations for a major announcement at the ECB’s December 3 interest rate decision may trigger a further decline in the exchange rate especially as the BoE largely stays on course to normalize monetary policy, and the euro-pound may continue to search for support in the week ahead should the Governing Council show a greater willingness to further embark on its easing cycle. At the same time, we may see BoE Governor Mark Carney prepare U.K. households and businesses for higher borrowing-costs as the central bank head is scheduled to testify on the quarterly inflation report next week, and the sterling may continue to outperform against its European counterpart should the fresh comments boost interest rate expectations for the U.K.
--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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