After a very lively December, the EUR/GBP pair appears to be stabilizing in a range above 0.8800. This large increase from 0.86 to a high of 0.8875 was largely due to a divergence in policy between the European Central Bank and the Bank of England, where the dovish BoE rate hike was in stark contrast to the ECB’s hawkish approach. Undoubtedly, 2022 has been a difficult year for Great Britain. ANZ Bank economists expect the pound (GBP) to remain under pressure against other G10 currencies in 2023.
Sterling’s performance this year will likely depend on how quickly the Bank of England can stop tightening policy
Given weak fundamentals in the UK, experts expect GBP to remain under pressure in 2023.
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Pound (GBP): Stabilizing after a busy December
In the opinion of experts from ING Bank, the area of 0.88/0.89 is a reasonable level for EUR/GBP consolidation at the end of the year and in the first quarter of 2023. In their view, sterling’s performance this year is likely to depend on how quickly England can stop tightening policy and how quickly expectations about the easing cycle can change. – We are slightly more bearish on the GBP/USD pair, where we believe the 200 bp Fed easing cycle, priced from summer 2023, may be slightly reduced. The 1.1650 level would be a target for GBP/USD should the US data (especially prices/wages) surprise positively in the new year, the report said. DOWNLOAD THE EBOOK AND GAIN AN ADVANTAGE IN THE MARKET ON THE EXAMPLE OF DAX
EURGBP daily rate, tradingview
Pound (GBP) to Remain Under Pressure in 2023 Against Other G10 Currencies – ANZ
2022 has been a difficult year for the UK. ANZ Bank economists expect the GBP to remain under pressure against other G10 currencies in 2023. “Given the weak fundamentals in the UK, we expect the GBP to remain under pressure in 2023 against other G10 currencies,” the report said. The underlying background for Britain is full of uncertainty. In the short term, households will have to deal with higher inflation, higher taxes and increased debt servicing costs. As noted in the report, this will reduce consumption and weaken the already poor growth prospects.
“All of them are negative for the pound,” it added.
At the same time, the GBP’s fiscal and political risk premium has fallen significantly since the “cable” bottomed out at 1.0350 in September. – GBP is unlikely to test these lows again. Given the new government and the announcement of the fiscal plan, we believe it has set a new low at 1.15 against the USD.
GBPUSD rate on a daily basis, tradingview
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