Commenting on Sterling Optimism Following UK GDP Data

  • Data , Risk Management
  • 11.06.2021 10:37 am

Commenting on UK GDP and sterling’s potential to reach levels not seen since early 2018, Jesús Cabra Guisasola, Associate at Validus Risk Management, said: “The UK economy grew 2.3% in April (Vs 2.4% estimated), which confirms the British economy is firmly recovering after contracting the most since 1709 last year. There are no doubts that the UK has been one of the countries coming out in a better position from the pandemic after the success of its vaccination program.

“However, there are reasons to be cautious as coronavirus cases continue rising, with the delta variant spreading rapidly. Prime Minister Boris Johnson and his government are now facing the dilemma of moving the country to the final stage of the reopening on the 21st of June. Moreover, the BoE will need to decide when the best moment is to start tightening its monetary policy as some members like Andy Haldane already voted to scale back the stimulus program during the last meeting.

“Nevertheless, there is optimism surrounding sterling in the coming months and any delay on the reopening would have a minimal impact on the recovery. Hence, we could see GBPUSD closer to the 1.45-mark, a level not seen since early 2018.”

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