The pound is again pushing higher this afternoon. GBP should remain well supported in the coming weeks. But with a lot of rate hikes already in the price, economists at Rabobank see GBP as vulnerable to a correction later on in the year.
Strong and stable leadership may generate a modest rally in the pound
“On anticipation that the market will unwind some of the anticipated policy tightening, we see scope for the pound to fall back by the middle of the year.”
“Stronger leadership in the UK could provide encouragement about the prospects for post-Brexit Britain and help to bolster the pound.”
“While we expect GBP to remain well supported vs. the EUR in the weeks ahead, we see scope for a move back towards 0.85 on a 3 to 6-month view.”