The BoE’s Decision Maker Panel boosted year ahead inflation expectations to 2.8% in November, from October’s 2.5%, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Short-term bull momentum on the intraday chart strengthens

“The MPC’s Dhingra, a dove, warned that tight policy is damaging the UK economy. But the uptick in inflation expectations will bolster the broader caution on the rate outlook reflected in comments from other BoE policymakers recently.”

“Cable also moved to test noted resistance at 1.2770 precisely yesterday, without showing signs of strengthening further. The pound remains close to break out resistance this morning and has the added support of strengthening, short-term bull momentum on the intraday chart.”

“Like the EUR, though, a move needs to come sooner rather than later now. Otherwise, spot risks dropping back to trend support at 1.2675/80.”