The Pound has continued to gain ground against the USD following a surprise 50 bps rate hike by the Bank of England
(BoE). Furthermore, the recent decline in the USD, triggered by the lower-than-expected US core inflation reading has helped to boost the GBP to its highest level in 15 months.
It has also been supported by the UK’s better-than expected May GDP figures and record-high wage growth. Growing market expectations of another 50 bps rate hike by the BoE in August, coupled with a potential dovish tilt by the Fed may support the GBP to strengthen further against the USD. However, the market may closely monitor the release of the UK’s June inflation data before making any significant moves. Any below-consensus reading may lead to a reassessment of BoE’s hawkish outlook.
1.309 against the USD
