Governor Carney’s speech led to a large repricing of front-end UK rates last week, with expectations of the first hike brought forward to December 2014 (from March 2015 prior) and two now priced by May ’15. Correspondingly, GBP/USD flirted with recent highs, and EUR/GBP made new cyclical lows. Now that the dust has settled, however, further near term gains from monetary policy repricing should be limited.
Read the full report: FX Daily