The difference between McCafferty and Haskel is literally night and day
The cherry on top of which is that we had the chance to hear from both sides today. Haskel will be replacing McCafferty when the latter's term expires in August, and this isn't going to be a change welcome by sterling bulls - if first impressions are to go by.
McCafferty was one of three members to dissent in last week's meeting, voting for an immediate rate hike instead. And his comments today pretty much reiterated that and the market wasn't too overly concerned by it.
The focus instead is on his replacement, Haskel. And initial comments already sent sterling lower with cable traded to a low of 1.3245 after he said that there are "risks to raising rates too fast".
But the bigger drop came after he said that there is scope for the BOE to cut rates in the event of an economic downturn instead. That is definitely not too encouraging, and the fact that he emphasised heavily on Brexit risks and uncertainty goes to show that he is definitely no like-for-like substitute to McCafferty in terms of hawkishness.
If anything, Haskel walks the line of extreme in terms of dovishness.
And that is something that sterling bulls will not be too happy with. The only bright side is that McCafferty will still be around to vote in the August meeting and if the economy improves even more by then, we could see a move before Haskel comes in.
Either way, cable is trading lower as a result of Haskel's dovishness and the key now for sellers is to stay below the hourly moving averages. That will re-establish a near-term bearish sentiment but a break of the 38.2 retracement level @ 1.3234 is also much needed for a further extension to the downside.
As for buyers, it's all about getting back above the hourly moving averages again otherwise it would undo all of the hard work done since the BOE meeting last week.
