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MNI ANALYSIS: Does the timing the first BoE hike matter to FX?

  • Much of the debate in the UK recently has focused on when the first Bank of England hike will take place, but even though expectations of the first hike have been pushed forward noticeably in STIR markets, the pound has only strengthened a little.
  • So, does the timing of the first rate hike matter for currency markets and is it something that GBP traders should be preoccupied with?
  • In our view, the conversation that should be going on in currency markets right now is where will rates be in 2-years time. This is of course influenced by the timing of the first hike, but at present when the second hike will be is of more interest to currency markets.
For the full document including more charts see:

EURGBP_vs_STIR_20210812.pdf




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