Pound Sinks to Three-Month Low Amid US Dollar Strength and Fed Hike Expectations

The British pound has reached its lowest value in three months against the US dollar, with GBP/USD falling to 1.3203 on Friday.

This decline is largely due to the strength of the US dollar, which is being supported by expectations of further interest rate hikes from the Federal Reserve and robust US economic data.

Bank of England Deputy Governor Clare Lombardelli has indicated that interest rates may need to rise further if energy prices remain high, but this has yet to provide meaningful support for the pound.

Disagreements persist within the Bank of England's Monetary Policy Committee (MPC), with MPC member Swati Dhingra maintaining a dovish stance and expressing concerns about inflation expectations not posing a serious threat.

From a technical perspective, analysts expect GBP/USD to continue its downward move towards 1.3175, supported by the MACD indicator's bearish signal line.