FXStreet reports that economists at MUFG Bank discuss GBP/USD prospects.

“The recent underperformance of the pound can be partly explained by less favourable market conditions that have turned more risk averse over the last couple of weeks reflecting heightened concerns over downside risks to growth in China and globally.”

“The pound’s failure recently to track higher UK yields could reflect concern that tightening policy so soon into the COVID-19 recovery is an unfavourable development for the UK economy. The BoE is clearly starting to put more weight on dampening upside inflation risks than continuing to support the recovery.”

“We expect cable to fall further especially once support at the 1.3600-level is broken.”