The pound sterling went through a significant volatility this week, while trying to maintain a balance in the GBP/USD pair. But due to analysts' encouragement, it managed to reach new levels.
On Friday, the pound's dynamics was relatively stable. The GBP/USD pair traded in the range of 1.3943-1.3944, periodically further rising. After declining for two weeks, the British currency found support at 1.3800. This became a kind of a recovery point for the GBP/USD pair. After that, experts highlighted that the pound started moving up with the formation of the bullish trend. The nearest upward target is set at 1.4000. After reaching this level, the position of the pound will strengthen, leading to the continuation of growth.
There are currently quite positive forecasts for the pound's further dynamics. Experts are expecting the recovery of the UK's economy and its national currency. According to the experts from ING bank, the pound will support the plans of the British authorities relative to the expenditures for the 2021-2022 fiscal year.
Scotiabank's currency strategists agree to this. On Thursday, the bank revised its forecast for the pound upwards. In particular, they expect it to reach the level of 1.4800 by the end of 2021, against their previous forecast of 1.4000. As for the long term, Scotiabank experts expect it to move to the 1.5000 mark by the end of 2022. Such optimism is boosted by the UK's successful COVID-19 vaccination program and improved growth prospects in the country.
According to Shaun Osborne, Scotiabank's Lead Currency Strategist, the current vaccination program will help speed up economic recovery, and strengthen economic growth in the United Kingdom. The British currency is strongly supported by the reduction of risks in the additional monetary policy easing (MPE). Scotiabank believes that the GBP will noticeably increase against this background.
On the wave of such optimism, several analysts expect the pound to sharply rise. This is not surprising, as its price has been increasing against the US dollar by 0.8% since this year began. Experts consider this to be the best result among the major G10 currencies. They also concluded that the Norwegian krone, which strengthened its position against the USD, was able to repeat the pound's price record, while other representatives of the G10 were in the "red" zone, yielding to the US dollar.
