Pound Faces Pressure as Hawkish Rhetoric Meets Fiscal Concerns

Rabobank Senior FX Strategist Jane Foley expects GBP/USD to trade around 1.32-1.33 over the next one to three months.

The British Pound may face pressure from steady interest rates and UK fiscal concerns, despite hawkish BoE rhetoric that could support Sterling initially.

Fed credibility is a concern after the latest Federal Reserve decision, which saw 30-year bond yields jump while short-term rates dropped, weakening the USD.

The Bank of England is expected to keep policy steady this year, but may talk tough to ensure market expectations for one or two rate hikes over the next six months remain in place.