The British pound rose on Thursday, after Mark Carney, Governor of the Bank of England surprised markets “hint” that the rise in interest rates in the UK may begin earlier than expected.
Taking into account the fact that sterling was trading around $ 1.70 on Friday morning, currency analysts almost unanimously agreed that in the near future we should expect downward pressure.
“This growth will be hard to keep,” – said Geoffrey Yu, currency strategist at UBS. Keith Jukes, head of currency units Societe Generale, agreed, stressing in his note, that the current level of sterling – “almost top”, which will be “subject to severe testing.” David Bloom, currency strategist at HSBC, has not changed its long-term prognosis, suggesting that the UK balance of payments deficit will lead to the collapse of sterling in the medium term.
However, there is an opposite opinion. Aymer Daly, chief market analyst at Monex Europe asserts that “the British would only move up” as the Bank of England will be the first of the major central banks, which raise rates.
“We are expecting. The pair sterling-dollar breaks through 1.70 level this summer – she says.