Sterling will look pretty vulnerable once rates have peaked – SocGen GBPUSD InterestRate CentralBanks UnitedKingdom Banks
It takes a lot of interest rate support to hold Sterling up, Kit Juckes, Chief Global FX Strategist at Société Générale, reports.Monetary policy expectations remain the biggest short-term driver of currency trends. There is a deep well of negative sentiment surrounding the UK and the Pound, that has been in place since the financial crisis and even more so since the Brexit referendum.
The rate differential required to get Sterling above USD 1.30 today, is far wider than it was a few years ago. That won’t prevent Sterling from being resilient for now, as long as monetary policy tightening remains on the table, but once rates have peaked, in the US, UK, Eurozone and elsewhere, Sterling will look pretty vulnerable.Information on these pages contains forward-looking statements that involve risks and uncertainties.
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