FXStreet reports that economists at MUFG Bank expect cable to sink into the mid to low 1.3000’s amid concerns that the UK economy will slow more notably heading into year-end.
“The lack of support for the pound from higher UK rates still suggests that fundamentals factors driving higher UK rates are not fully supportive for a stronger pound. The risk of higher inflation becoming more embedded in the UK economy posing downside risks to long-term pound valuation.”
“Evidence of a deeper slowdown in UK growth heading into year-end and/or the BoE disappointing expectations for the amount of rate hikes in the coming months should see cable dropping back into the mid to low 1.3000’s especially if global equities lose upward momentum as well.”