Gbpusd To Reach Higher

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Gbpusd To Reach Higher

Gbp/Usd To Reach 1.35 In Coming Months - Standard Chartered

The new forecast from Standard Chartered shows that GBP/USD will be at 1.35 in the coming months. Overall, this is a bullish forecast from Standard Chartered and shows they favour the GBP against the USD.

Standard Chartered added that the GBP is still oversold, which means there's a potential for upside. Also, the global players are likely to cover their short positions, which will benefit the GBP.

Rate Difference Will Favor The Gbp

The bank commented that GBP/USD will face high selling pressure above 1.3500. So, while the GBP/USD can recover to 1.35, any more gains will be limited.

The fiscal policy of the UK is also a big drag on the GBP/USD pair. So, that's something that will prevent any more upside in the GBP in the coming months.

However, the bank is still bullish when it comes to the UK government bonds. They also added that the long-term yields in the UK are expected to move higher.

As for the BoE policy, Standard Chartered believes that the central bank will remain dovish in the coming months. So, we can expect potential rate cuts from the BoE in the coming quarters.

In general, lower rates are not positive for the Pound and will actually put downward pressure. However, Standard Chartered believes that the upcoming rate cuts are already priced in.

So, even if the BoE lowers the rates, the selling in GBP/USD will remain limited. But an outsized rate cut will surprise the market and will send the GBP/USD lower.

Standard Chartered also commented on how the UK rates are expected to stay the highest in the G10 countries. So, that's also something which will keep the GBP an attractive option as a carry currency.

Meanwhile, the US Federal Reserve is also expected to keep up with the rate cuts. So, even if the BoE cuts the rates, the rate difference will still favor the GBP.

The bottom line is that higher yields will support the GBP/USD in the coming months. This means we can expect the GBP/USD to move towards 1.35 in the near future.

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