June 18 2021
The surge in the US Dollar on the back of the FOMC and their dot plot interest rate rises in 2023, coupled with the let’s talk about tapering soon, comments from chair Powell, has put a slight dent into my bullish outlook for the GBP, particularly against the Dollar.
The Fed has made quite a big jump from the last meeting where they said the policy is appropriate, to now where it seems the policy is going to have to change. But actually, the policy has not changed, the FOMC is not keeping up with the US economy and falling behind the curve. When this happens the Fed has to play catch up, their policy changes will be harsher, than if early action took place.
Why do I still prefer the GBP to the USD?
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