The struggle of the pound sterling (GBP) to maintain rhythm with the euro (EUR) this year reflects a change in market optimism in favor of Germany and the Eurozone. The Reeves Foreign Minister will undoubtedly join the companies in the celebration if the BOE returns to lower the fees in August. Certainly, he will welcome the positive implications of a loosening in monetary policy on the growth prospects, reports Jane Foley, FX Analyst of Rabobank.
BOE rates cut could offer temporary relief
“That said, the forecasts of economists for relatively slow growth of both the GDP of the United Kingdom and productivity this year suggest that it is very unlikely that Reeves can trust an improvement of the economic impulse to get out of a difficult fiscal position.”
“After having surpassed EUR in the last two years, the pound has lost ground in front of the single currency so far this year and the EUR/GBP is advancing well towards our objective of 0.87. We have advanced this goal to a 3 -month perspective and we have raised our forecast at 6 months to 0.88.”
“Following the reduction of fears on a recession in the US and the risks of inflation, the USD has recovered some land and has become the coin of the best yield G10 so far this month. We see margin for a greater coverage of shorts that drives the USD in a perspective of 1 to 3 months and, therefore, we see a greater low pressure on the cable on the cable in this horizon in this horizon.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
