GBP/USD will struggle to hold its recent gains – Rabobank

The Pound has regained its position as the best-performing G10 currency in the year. Economists at Rabobank discuss GBP outlook.

Cable to edge lower toward 1.22 on a three-month view

On the assumption that UK economic data will show increased signs of stress in Q3, and given also our view that the USD will remain well supported in the coming months, we expect that Cable will struggle to hold its recent gains.

The risk for GBP is that further progressive rate hikes from the Bank significantly undermine the recently improved growth outlook.

We see scope for Cable to edge lower to GBP/USD 1.22 on a three-month view.