BoE Governor Bailey’s comments at Jackson Hole Friday reflected a cautious near-term policy outlook, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

BoE Gov Bailey maintains cautious policy outlook

“Bailey said it was too early to declare victory over inflation with price growth not sustainably back to target. The remarks support market pricing that suggests policymakers are likely to await more data before easing rates again late this year (November). GBP has drifted marginally lower in quiet trade, with UK markets closed for the bank holiday.”

“Cable losses are marginal from Friday’s 1.3230 high (highest since early 2022). Spot is consolidating ahead of minor trend support at 1.3178; weakness below trend support today could prompt a deeper correction in Cable but trend dynamics here remain bullish, suggesting limited scope for weakness for now—and the potential for gains to extend to 1.3330 moving ahead.”

“Cable support looks firm at 1.3125/30.”