Widening terminal rate differentials between the UK and US will support upside in the GBP – ANZ

Market news

21 June 2023

Widening terminal rate differentials between the UK and US will support upside in the GBP – ANZ

Economists at ANZ Bank discuss GBP/USD outlook.

Year-end forecast for GBP/USD maintained at 1.30

We expect the Bank of England to raise interest rates two more times before pausing, and we do not anticipate any rate cuts this year. However, the markets are pricing in a terminal rate of 5.7%.

Looking ahead, we believe that widening terminal rate differentials between the United Kingdom and the US will support upside in the British Pound.

We maintain our year-end forecast for the GBP/USD pair at 1.30.

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