GBP: Bailey's testimony in focus this week – ING

The UK data calendar is quiet this week, and the Pound Sterling (GBP) will primarily be driven by external input. The major domestic event is probably the Treasury Committee questioning of Bank of England Governor Andrew Bailey and other MPC members on Wednesday, ING’s FX analysts Francesco Pesole notes.

A decisive break below 1.25 in Cable is possible in the coming weeks

"The February BoE cut was accompanied by a dovish vote split, but data has since pointed to more caution on easing. Fourth-quarter growth, December wages and January CPI all came in stronger than expected, and the risks are that we could see some hawkish adjustment in Bailey’s stance."

"We remain of the view that GBP/USD rallies won’t prove sustainable beyond the very near term as we expect the UK budget event at the end of March to trigger fresh pressure on the pound also by potentially unnerving the fragile gilt market. We expect a decisive break below 1.25 in Cable in the coming weeks, but this week the pair may remain supported."