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UK Market Preview: BOE Rate Cut Nearly Certain, Say FX and Bond Traders
11:34 04/09 (CEP News) - Worsening credit conditions and poor housing data has brought prospects of a rate cut from the Bank of England to a near certainty according to fixed income and currency strategists, who said the probabilities of a 25bp rate cut on Thursday had risen sharply over the last week. Consequently, foreign exchange traders think the pound could weaken further while fixed income strategists think some more aggressive cutting from the BOE has yet to be priced in. "The market has probably taken on board a 25 bps cut now," said Adam Cole, chief currency strategist at RBC Capital Markets, referring to weaker-than-expected housing data from the UK over the last several days. He said the BOE would be too cautious to move 50 bps but that the probability of such a discussion is increasing. This is prompting many traders to believe the Bank could cut rates back-to-back, something it seldom does. Full Article available @ [url]http://economicnews.ca/login.php?page=reportsDetails&newsid=69633&prevview=&view=details&country=&plimit=0&category=All%20Economic%20Reports[/url]