GBP/USD has climbed back above 1.33 recovering from a marginal new low for the year at 1.3272. Economists at Scotiabank expect the cable to move downward as the Federal Reserve catches up the pace of the Bank of England (BoE) in its hiking cycle.
Sterling only to recover once risk sentiment improves
“With no clear advantage on the mon-pol front – as the Fed catches up to the BoE in its hiking cycle later this year – the scope for GBP gains against the USD through the remainder of the year looks limited and we may only see a modest recovery once risk sentiment improves.”
“The GBP is nearing oversold on the RSI, however, so a sharp move lower does not appear imminent and the pound may soon settle into a consolidation zone around current levels.”