GBP/USD is holding on to modest daily gains around 1.1450. Looking ahead, HSBC economists expect pair tests yearly lows in coming weeks.
Fiscal cost of energy cost relief plans could pressure GBP
“We suspect that GBP/USD to challenge yearly lows again in the coming weeks“.
“A likely acceleration in the pace of Bank of England (BoE) tightening looks likely to heighten recession fears. For the next BoE meeting on September 22, the market is 80% betting on a 75 basis point hike instead of 50 basis points (our economists expect this smaller move), which creates some downside risk for the GBP.”
“Fiscal cost of UK government plans to ease energy costs could also pressure GBPespecially given the continued deterioration of the foreign balance.”
Source: Fx Street
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