BoE September rate hold could make pound proud
August 13 (Reuters) - The pound might revisit its July highs against the dollar and euro if the Bank of England keeps interest rates unchanged next month, when the Federal Reserve and European Central Bank are both expected to cut.
Hawks advocating a BoE rate hold in September were heartened by Tuesday's disclosure that the UK unemployment rate fell to 4.2% in June - a surprise which lifted GBP/USD and GBP/EUR to their highest levels since the start of last week, at 1.2813 and 1.1720 respectively.
Markets currently see a 34% chance of the BoE cutting rates on Sept. 19. 0#BOEWATCH
CFTC data on FX positioning showed the net GBP long almost halved from an all-time high to 74,399 contracts in the fortnight ended August 6 - a period which encompassed the BoE's August 1 interest rate reduction.
Cable scaled a one-year peak of 1.3044 on July 17, with GBP/EUR notching a 23-month high of 1.1927 the same day.
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GBPUSD https://tmsnrt.rs/4cnFf9x
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(Robert Howard is a Reuters market analyst. The views expressed are his own)
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