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British Pound Outlook: Hawkish Twist By BoE's Saunders Sends Sterling Sharply Higher

British Pound Outlook: Hawkish Twist By BoE's Saunders Sends Sterling Sharply Higher

Nick Cawley, Strategist

British Pound (GBP) Price Outlook

  • Sterling rallies on hawkish twist by BoE policy maker.
  • GBP/USD eyes 1.3900

The British Pound is powering higher after BoE policy maker Michael Saunders suggested during a speech on inflation that if activity and inflation indicators remain in line with recent trends and downside risks to growth and inflation do not rise significantly ‘ then it may become appropriate fairly soon to withdraw some of the current monetary stimulus…’. Saunders went on to say that one option would be to curtail the current QE program – set to end at the end of this year – in the next month or two and ’before the full GBP150 has been purchased’. Saunders also said that further monetary policy action next year may also be an option.

The Inflation Outlook – Speech by Michael Saunders

This hawkish turn by Saunders has seen Sterling turn sharply higher, pressing back against 1.3900 against the US dollar. EUR/GBP has also turned lower and is nearing 0..8510 and yesterday’s multi-month low around 0.8500.

GBP/USD 5 Minute Price Chart (July 15, 2021)

British Pound Outlook: Hawkish Twist By BoE's Saunders Sends Sterling Sharply Higher

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What is your view on Sterling– bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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