GBP/USD: Bullish Extension Expected as Pound Sterling Price Rises – Latest News and Forecast

Time Stamp: March 21, 2023 3:53 PM
Source Node: 2526126

The GBP/USD currency pair has been on an upward trend in recent weeks, with the pound sterling price rising against the US dollar. This bullish extension is expected to continue in the coming weeks, as economic data and political developments in the UK and US support the pound’s strength.

One of the key drivers of the pound’s rise has been the UK’s successful vaccine rollout, which has boosted investor confidence in the country’s economic recovery. The UK government has set a target of vaccinating all adults by the end of July, and so far, over 30 million people have received their first dose of the vaccine. This has led to a gradual easing of lockdown restrictions, which is expected to support economic growth in the coming months.

In addition to the vaccine rollout, the UK economy has also shown signs of resilience in recent months. Despite the challenges posed by Brexit and the pandemic, GDP growth in the fourth quarter of 2020 was stronger than expected, and the Bank of England has revised its growth forecast for 2021 upwards. This positive economic outlook is likely to support the pound’s strength in the coming months.

On the other hand, the US dollar has been under pressure in recent weeks due to concerns about rising inflation and a potential shift in monetary policy. The Federal Reserve has indicated that it will keep interest rates low for the foreseeable future, but some investors are worried that rising inflation could force the central bank to raise rates sooner than expected. This uncertainty has led to a sell-off in US Treasury bonds, which has weakened the dollar.

In terms of political developments, both the UK and US have seen significant changes in leadership in recent months. In the UK, Boris Johnson’s government has been strengthened by its successful vaccine rollout and its handling of Brexit, while in the US, Joe Biden’s administration has promised a significant stimulus package to support economic recovery. These political developments are likely to support investor confidence in both countries, which could further boost the pound’s strength against the dollar.

Overall, the outlook for the GBP/USD currency pair is bullish, with a continuation of the current upward trend expected in the coming weeks. However, as with any currency pair, there are risks to this outlook, including potential setbacks in the vaccine rollout or unexpected shifts in monetary policy. As always, investors should exercise caution and monitor economic and political developments closely when trading this pair.