Bank of Montreal: Sterling boosted by improving risk sentiment

Sterling rose against the euro on improved risk appetite after Federal Reserve Chairman Jerome Powell signaled a slower pace of rate hikes, BMO said. Sterling is more risk-sensitive than the euro, currency strategists at BMO said in a note.

BMO noted last month that EUR/GBP could fall to 0.8500, and that more positive market sentiment would help the pair move towards that target. The bank noted that if the market maintains its current dynamics, it will lock in some profits at the 200-day moving average at 0.8539.