We think the markets are wrong to expect the Fed to keep interest rates at their peak for almost as long as the Bank of England. If so, then the recent downward pressure on the pound from the decline in UK relative interest rate expectations will soon fade. That said, we still think the pound will weaken from $1.23 now to around $1.22 by the end of the year as a further softening in the global economy boosts demand for US dollars.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services