EUR/GBP took off after comments from BOE governor King, breaking important resistance at 0.8645 in the process and triggering stops.
King, while trying to sound hawkish at times, set the stage for a continuation of his do-nothing strategy from the BOE unless the UK economy sees second-round effects (wage hikes as a result of rising inflation). Despite inflation that could more than double the BOE’s target, he says it will return to earth next year…
A close above 0.8645 would add to the bullish backdrop for EUR/GBP after today’s data shock from the UK.
