Following the latest reopening news and May’s Bank of England meeting, we take the time to update our GBP view. We continue to see GBPUSD trade above the 1.40 handle as sentiment around sterling benefits from positive UK economic data, however the magnitude of the pound’s rally largely depends on what post-pandemic consumption looks like. Following the Bank of England’s latest projections, which we are inclined to agree with, we anticipate GBPUSD to rally to 1.46 in the coming twelve months, although the level of uncertainty around our medium-term forecasts remains high. Additionally, we base our forecasts on the assumption that the BoE will raise rates by 25bps in H2 2023.
Read our latest GBP Update in full here:
Author: Simon Harvey, Senior FX Market Analyst
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