Market Outlook: BoE Deputy Governor Breeden's Remarks Set to Influence Sterling

Forex - The Deputy Governor of the Bank of England, Sarah Breeden, may create headwinds for the pound if she adopts a dovish stance while discussing the outlook for UK inflation and monetary policy in Edinburgh.

A dovish stance from Breeden would indicate a higher likelihood of voting for a rate cut by the BoE next month compared to a hold, and if she votes for a rate cut, it would help tilt the scales in favor of a reduction.

Breeden was among those who voted for the BoE rate cut in August with a 5-4 vote, and she also supported the subsequent cut in November. Additionally, she was one of the six Monetary Policy Committee members who voted to keep the Bank Rate at 4.75% in December.

Markets currently see a two-thirds chance of the BoE cutting rates on February 6. UK inflation data for December will be released next week (January 15). The Consumer Price Index (CPI) rose to 2.6% in November, after standing at 2.3% in October and 1.7% in September.