Sterling edges down before BoE's Bailey speech
TLT•Sterling fell 0.2% against the dollar to $1.3185 and 0.1% against the euro ahead of a speech by Bank of England Governor Andrew Bailey. Money markets priced in more than an 80% chance of a rate hike next month and two quarter-point hikes by February.
1. Sterling slips
The pound edged lower against the dollar and euro on Thursday before speeches by Bailey and BoE policymaker Clare Lombardelli. Sterling was at $1.3185 against the dollar, just above a three-month low of $1.3181 reached last week, and at 84.79 pence per euro, ending a nine-day run of gains against the single currency.
2. Rate expectations
Investors are watching the speeches for clues on whether the BoE could raise rates next month. Bailey and Lombardelli both voted to keep rates unchanged at the last meeting. Money market futures implied more than an 80% chance of a hike next month, with two quarter-point hikes fully priced in by the February meeting.
