GBP/USD is mainly a USD story, with UK-US yields spreads favouring the USD. Ahead of the Bank of England (BoE) meeting next week, economists at Westpac remain neutral, expecting an extension of the recent range of 1.2430-1.2600.

GBP/USD remains mostly a USD story

“The BoE is expected to hike four more times this year, taking the base rate to 2.0% which is considered around neutral. Despite the prospect of higher rates, GBP remains vulnerable to retesting its recent lows.” 

“GBP/USD is mainly a USD story, with UK-US yields spreads also favouring the USD.”

“Ahead of the MPC, we remain neutral, expecting an extension of the recent range of 1.2430-1.2600.”