GBP/USD: Not enough good news for an uptrend

GBP/USD is moving around the 1.13 level today. Economists at Rabobank have been negative towards the pound for several months, believing that both the UK’s economic and political outlook remains too uncertain for the sterling’s outlook to turn positive.

UK fundamentals are still weak

“BoE Governor Bailey’s hawkish comments over the weekend confirm that the BoE is preparing to raise interest rates aggressively going forward. This will provide some support to the pound, although higher rates coupled with the withdrawal of the Truss tax pledge are weighing on the recession outlook for the kingdom United”.

“Apart from exasperating some deal-seekers, the disastrous events of the past few weeks will do nothing to make up for the shortfall in investment growth Britain has seen in recent years, nor the large current account deficit.”

“Our 3-month forecast of 1.06 appears to be a bit further out than it was a few days ago. However, we haven’t seen enough good news to review it upward.”

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