GBP/USD: Three factors underpins the pound, BoE to provide and additional boost – Citibank

Economists at Citibank highlight three factors that are currently supporting the pound. Furthermore, GBP is set to rise fueled by expected rate hikes from the Bank of England. 

Sterling to get an added boost from UK’s monetary policy outlook

“Factors supporting GBP currently include subdued UK COVID-19 hospitalizations; UK assets attractive from both valuation and post-COVID economic normalization angles; and receding political risks regarding EU-UK negotiations on the Northern Ireland protocol and no Scottish independence referendum near term.”

“With the Bank of England at its September meeting lowering the bar towards commencing hiking rates as early as November 2021, GBP is likely to get an added boost from UK’s monetary policy outlook which is now well placed to front-run the Fed.”