In the Asian session on Friday (June 2), GBP/USD rose to 1.2526, an increase of 0.02%. A better-than-expected outlook for the UK economy and expectations of a Bank of England rate hike helped lift the pound.
Bank of England dynamics
The market expects the Bank of England to raise interest rates more than 4 times, and does not rule out the possibility that the peak interest rate will rise above 6.0%. The current interest rate is 4.5%. Strategist Matthew Ryan said: “Our optimism on sterling is based on this outlook, as well as the resilience of domestic demand in the UK. Most signs point to relatively modest economic growth in the UK this year, but this has been much better than previously expected and growth Forecasts continue to be revised upwards.”
