GBP/USD to push lower to 1.23 on a one-to-three-month view – Rabobank

GBP/USD reached a high of just shy of 1.28 earlier this month. The softer-than-expected UK inflation data, however, has challenged the better tone of the Pound. Economists at Rabobank analyze Cable’s outlook.

Room for GBP appreciation on hawkish BoE rhetoric may start to wear thin

As inflation edges closer to target, the market will have an increased tendency to disregard hawkish comments from policymakers. This is likely to be particularly the case in the UK given the weakness of the economic outlook. 

If the tone of UK economic data worsens, room for GBP appreciation on hawkish BoE rhetoric may start to wear thin. 

We see scope for Cable to push lower to 1.23 on a one-to-three-month view.