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BOE’s Hawkish Turn Reignites the Pound’s Pre-Pandemic Strength
The pound is about to enter a new era of strength against the euro, thanks to the Bank of England’s hawkish turn. Traders have raised the odds of a rate hike in February to 60% after the BOE made clear last week that it’s beginning a countdown to end the era of rock-bottom borrowing costs. And it’s given sterling the momentum it needed to break past 85 pence per euro -- a barrier that had been intact since early April -- to hit the strongest level since February 2020. The shift comes as pound outperformance against the euro ground to a halt after a 4.2% gain in the first half of the year, the best since 2015. ... (full story)