GBP/USD: Consolidation now, at 1.47 by year-end – Lloyds Bank

By FXStreet Analysts from FX Strategy at Lloyds Bank expect GBP/USD to trade around 1.47 by year-end.

Key Quotes:

“GBP/USD has had mixed fortunes over the past month. The currency pair fell below 1.39 for the first time since 2009, as expectations of future UK interest rate rises were pushed back and uncertainty surrounding the EU referendum kept the GBP on the back foot. However, pressure on the pair subsided in the important 1.40 to 1.35 range – a region which it has not been below since 1985.”

“In the short-term, we expect the pair to experience a period of consolidation – we forecast 1.40 for end Q1 and 1.44 for end Q2. However, beyond the uncertainty in the coming months, GBP/USD should rally back towards fair value, which is estimated around 1.47 by end-2016, with further strength tempered by possible US interest rate hikes.”
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Source:: FX Street