UK economic data, guidance from the Bank of England (BoE) and, very importantly, direction from the Tory government and its own new leadership will set the tone for the British pound. Economists at Rabobank expect further weakness for the GBP in the coming weeks.
PM Truss has the potential to regain some investor confidence
The promise of higher interest levels is not a warranty of GBP strength once the economy is facing recession. To the end, news of another bank holiday this month isn’t encouraging for the pound considering that it really is set to detract from the GDP numbers for September.
If Truss will get a method to patch together a remedy that strengthens relations with the EU, investors could take heart. This, however, will never be easy.
For the present time, the headwinds facing the pound remain quite strong. We maintain our one-month forecast of GBP/USD 1.14.
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