📝 Sterling Pound To Fall To 1.20 In The Year Ahead: HSBC FX Strategy

Sterling may weaken further as the deteriorating U.K. economic outlook may constrain the Bank of England's ability to deliver on the market's interest rate rise expectations. The BOE raised its key rate 25 basis points to 1.0% Thursday, but signalled that the market's rate-rise bets were too aggressive as it downgraded its growth outlook and expects inflation to fall well below the 2% target in three years. The balance of this news will, in our view, continue to weigh on GBP, expect GBP/USD to fall to 1.20 in the year ahead. - HSBC FX Strategist