Home›Forex›Major Pairs›Sterling faces June GDP test as BoE hawkishness builds

Sterling faces June GDP test as BoE hawkishness builds

After a hawkish BoE voting tilt, markets will watch June monthly GDP to gauge whether Sterling’s support can carry into September.

Reported · Written up by our desk · Major Pairs

Sterling has edged modestly higher against the euro and Swiss franc this week, aided by an increasingly hawkish tone from the Bank of England, according to Action Forex.

At the July 30 meeting, the BoE’s Monetary Policy Committee voted 6–3 to hold Bank Rate at 3.75%, while Megan Greene, Catherine Mann, and Huw Pill backed a hike to 4.00%, a shift the outlet says is a more meaningful signal than a static minority.

Action Forex notes that Thursday’s June monthly GDP is the key test for whether this hawkish drift can persist, with EUR/GBP and GBP/CHF moves tied to how quickly the BoE might close the policy gap with the ECB and how far higher rates could be priced versus expectations for the Swiss National Bank.

The outlet adds that while Q2 headline GDP is expected to show 0.4% quarter over quarter, down from 0.6% in Q1, that figure may overstate underlying strength because earlier in the quarter firms and clients front-loaded purchases due to expected price increases and supply disruption, which appears to have faded by June data.

More like this

Sources