Sterling Remains Attractive Even if BOE Fails to Meet Rate-Rise Expectations
Dow Jones10-26
1225 GMT - The Bank of England is unlikely to raise interest rates as much as markets expect but this probably won't have a major impact on sterling, UBS Global Wealth Management foreign exchange strategist Benjamin Jarret says in a webinar. The relationship between the euro-sterling exchange rate and a simple two-year interest-rate differential has been pretty weak this year, he says. Regardless of moves in rate differentials, sterling does benefit from being quite a high-yielding currency, he says. Sterling "still looks pretty attractive against the euro." UBS expects the BOE to raise rates by 25 basis points in November and February whereas LSEG data show markets pricing more than 100 basis points over the coming year.
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