Today's Boe to put a bottom in any excess GBP weakness? - Nomura

Analysts at Nomura explained that they can envisage short-term EUR/GBP heading back to 0.90, but said that, ultimately, the BoE will react if there is a continued FX selloff in the medium term and today’s decision should put a bottom in any excess GBP weakness. 

Key Quotes:

"If anything, today’s market reaction raises the probability of more hikes if it is sustained and we should remember that when discussing the longer-term outlook. It’s not just the Bank of England though, attention in coming weeks will return to politics. Because of the recent political turmoil in Westminster, the current run of negative polling for the government’s negotiations and whether Brexit was right or wrong to do, the Conservative party will be looking for a win."

"The Brexit negotiations (9-10 November) and the autumn budget (22 November) may be used for that purpose, but as we saw with the Florence speech, even with good intentions the government does not always elicit a positive market response. We still expect a more pragmatic approach from the UK to lead to progress by the December summit, the November round may tee up the market for that and is another risk event to watch."