Carney cools GBP optimism - ING

"The August 'Super Thursday' meeting was a dovish disappointment for the pound and we expect the currency to remain under some near-term pressure," Viraj Patel, Foreign Exchange Strategist at ING, explains.

Key quotes:

"The slightly more cautious growth projections, dichotomy of MPC views and lack of coherent policy bias means that the bar for a 2017 policy move still remains pretty high; we continue to see a credible BoE rate hike debate being more of a 2018 story."

"The 6-2 MPC split vote - with no new rate hike dissenters - can be seen as a dovish disappointment, with some corners of the market having hoped for greater hawkish gestures from the Bank today. While the immediate fallout for the pound should be contained given the limited scope for the UK rate curve to flatten further, we continue to see near-term downside risks; the BoE's patient policy approach means that GBP can be bucketed into those currencies vulnerable to being sold under the theme of monetary policy divergence."

"We expect EUR/GBP to now overshoot our 0.90 forecast for 3Q17 and stay above here; unlike previous times when we have reached this level - namely during crisis episodes - there are now fundamental reasons to remain at these elevated levels for a sustained period of time."

"Given that GBP/USD has been riding on the coattails of a rising EUR, we would look for a recovery in the politically-charged USD - and easing of EUR euphoria - to weigh on GBP/USD. This points to downside risks to below 1.30 in the near-term, although we remain comfortable with our 1.35 year-end forecast."