British Pound’s outlook improves with its economic outlook – DBS

FXStreet Insights Team FXStreet

GBP/USD has the potential to trade within a higher 1.30-1.40 range through 2025, DBS’ FX analysts Philip Wee and Chang Wei Liang note.

BoE to reduce interest rates slower than the Fed

“In August, the 10Y yield differential between UK Gilts and US Treasuries turned positive for the first time since Sep 2023, indicating that the Bank of England would reduce interest rates slower than the Fed. The IMF noted that the UK economy was recovering faster than expected after a mild recession in 2023.”

“The Labour Party’s decisive victory in the July snap elections should bring more political stability after years of volatility under Conservative leadership. Prime Minister Keir Starmer had ruled out rejoining the EU but wants to rebuild and strengthen the UK’s post-Brexit relationship with the EU.”

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