Following on from the RBNZ rate hike yesterday, overnight comments from the UK’s Mark Carney that the BoE might hike rates sooner than expected has certainly thrown the cat in amongst the pigeons. The GBP had already been making some strong gains before the comments and traders will need to be very careful now if they plan on shorting the rampaging pound.
The obvious market targets now are .8000 in EUR/GBP and 1.7000 in cable, and we will certainly get a strong test of the former level in early Asian trade.