British Pound to strengthen over 2023 – HSBC
|GBP/USD is mainly driven by risk sentiment. Economists at HSBC expect the Pound to bounce back higher.
What will actually drive the GBP going forward?
“Risk sentiment (using S&P 500 Index as a proxy), rather than rate differentials, remains the key dominant driver for the GBP. In turn, this means the UK economic outlook is what should matter to the GBP.”
“The BoE now sees a shorter, shallower recession than in its gloomy November forecast, which was based on much higher energy prices. The UK economy is now expected to contract almost 1% over the next five quarters, rather than 2.9% over the next eight quarters.”
“Finally, we think a less hawkish BoE could turn out to be GBP-positive later in the year, because of a potentially less abrupt policy shift.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.