British Pound: BoE repricing risk keeps Pound vulnerable – BBH
According to Elias Haddad at Brown Brothers Harriman, GBP/USD is lower on broad Dollar strength and EUR/GBP is slightly firmer after weaker United Kingdom (UK) September Purchasing Managers' Index (PMI).
According to Brown Brothers Harriman analyst Elias Haddad, the British Pound (GBP) is facing vulnerability due to the Bank of England's (BoE) risk re-pricing. The GBP/USD exchange rate is declining with the overall strength of the Dollar, while EUR/GBP is slightly stronger after weaker UK Purchasing Managers Index (PMI). The composite PMI for the UK in September fell to a three-month low of 51.7, which was lower than the expected 52.0 and August's 52.5.
The services sector growth slowed, while manufacturing activity picked up, and inflationary pressures intensified. Haddad believes the BoE may not need to tighten interest rates as much as markets anticipate, leaving the Pound exposed to a potential dovish repricing.
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