Sterling Backed To Push Higher
The British Pound is predicted to appreciate in value against the Euro over coming weeks by a number of foreign exchange strategists with suggestions levels may even hit 1.25 not being discounted. The calls come at a time of increased volatility in currency markets that saw the Pound fall sharply against the Euro and Dollar at the start of the week before ultimately recovering those losses over subsequent sessions.
Yesterday saw the ECB make no changes to interest rates with the main rate being kept on hold at 0.0% with Bank President Lagarde stating inflation was expected to remain considerably below target and that revised guidance is aimed at maintaining an accommodative stance.
Looking at the rates, GBP/EUR continued its ascend higher and peaked above the 1.17 towards the end of the US session, GBP/USD saw minimal movement and continued to trade in a tight range between the 1.37 region whilst the EUR/USD is being kept on its toes as the Dollars safe-haven nature keeps the greenback firm in volatile times.
Money market pricing has also shown the Bank of England is expected by investors to raise interest rates in 2022, while the FED is expected by markets to raise rates in 2023 and the ECB in 2024.