Orbex's analyst on GBP/USD: It’s important to note that UK interest rates may be raised during the next BoE meeting in early May
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GBP/USD is at its highest level in a year. Will the pound continue to strengthen and why? Let's hear from David Kindley, Market Strategist at Orbex.
David Kindley (Orbex): The GBP/USD has been on a steady rise in 2023 due to the improvement in the UK’s economic outlook and on bets that the Bank of England (BoE) will be looking to raise interest rates more aggressively. The raising and lowering of interest rates is one of the biggest driving factors in the strength or weakness of a currency, and with BoE’s key rate currently at 4.25% there’s certainly some more firepower for the Bank of England in terms of raising its key rate in 2023.
There are expectations for both central banks in the US and the EU to also raise their key rates in May, which means that we can expect a lot of volatility in the forex market
David Kindley (Orbex): It’s important to note that UK interest rates may be raised during the next BoE meeting in early May, which could be a key period for both the pound, but also the Euro and the USD. There are expectations for both central banks in the US and the EU to also raise their key rates in May, which means that we can expect a lot of volatility in the forex market, with interest rate increases becoming more and more analogous to their respective currency’s upside potential.
