Investors expect the pound will rally to its highest level against the dollar in two years as the Bank of England proves to be slower at cutting interest rates than its peers.
Wall Street giant Goldman Sachs thinks sterling will hit $1.30 and 84p per euro in the next few months as the US Federal Reserve and European Central Bank begin cutting interest rates.
The pound was last down 0.1pc against the dollar at $1.26 but up 0.1pc against the euro at 85p.
Strategist Isabella Rosenberg said the pound has “benefited considerably from the global disinflation trend and shift toward policy easing”.
Meanwhile, PGIM Fixed Income warned that tax giveaways in the next Budget ahead of a general election could force the Bank of England to keep interest rates higher.
Global investment strategist Guillermo Felices said: “There’s life in the pound.
“Currencies love a tight monetary policy and loose fiscal policy, and we’re getting a flavour of this in the UK.”
The Bank of England is expected to hold interest rates at 16-year highs of 5.25pc tomorrow, with money markets predicting four quarter-point cuts this year to take rates to 4.25pc.
The Fed is expected to make five equivalent rate cuts and the European Central Bank is predicted to make six before the end of the year.
Read the latest updates below.
https://news.google.com/rss/articles/CBMibGh0dHBzOi8vd3d3LnRlbGVncmFwaC5jby51ay9idXNpbmVzcy8yMDI0LzAxLzMxL2Z0c2UtMTAwLW1hcmtldHMtbGF0ZXN0LW5ld3MtbmF0aW9ud2lkZS1ob3VzZS1wcmljZS1nc2stc3NlL9IBAA?oc=5
2024-01-31 10:06:00Z
CBMibGh0dHBzOi8vd3d3LnRlbGVncmFwaC5jby51ay9idXNpbmVzcy8yMDI0LzAxLzMxL2Z0c2UtMTAwLW1hcmtldHMtbGF0ZXN0LW5ld3MtbmF0aW9ud2lkZS1ob3VzZS1wcmljZS1nc2stc3NlL9IBAA
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