GBP / USD approaching its highest level in 2021 (1.4241) as it prolongs progress since the beginning of the month and fresh comments from Bank of England (BoE) officials may British pound as the central bank slows down the pace of its weekly asset purchases.
Basic forecast for the British pound: Neutral
GBP /USD trades fresh at its highest monthly level (1.4234) before the last full week of May in rising numbers Federal Reserve officials warn of a temporary rise in inflation and recent BoE comments could boost the exchange rate, as several members of the Monetary Policy Committee (MPC) plan to testifyHouse of Commons Finance Committee May 24
Source: United Kingdom Parliament
The BoE can point out better prospects for UK legislators thanGDP is expected to grow sharply in the second quarter of 2021, And the central bank may show greater willingness to change gears thanGDP is expected to recover strongly before CdOVID until the end of the year. “
In turn, in the coming months, the MPC may gradually adjust future guidelines in the light of internal differences within the central bank, with one member arguing thatthe improved economic outlook justified the reduction in the level of additional stimulus provided to the UK economy at this meeting, reducing the purchase of assets in the current program from GBP 150 billion to GBP 100 billion;. “
That being said recent notes: BoE orofficials can keep the British pound on the water – during the growing debate in the central bank to reduce emergency measures, and – GBP / USD seems to be a track to try Highest of all years: 2021 (1.4241) as it extends the advance from the beginning of the month.
– Written by David Song, currency Strategist
Follow me on Twitter at @DavidJSong