According to some economists, in 2022, the British pound could become the most promising currency to invest in. It is considered a potential rival to the greenback.
The current monetary policy of the Bank of England is contributing to the high competitiveness of their national currency. That is why it has every chance to outperform the US dollar. What is more, it is likely to do so.
Experts also emphasize that the US dollar remains quite strong. It is still the most attractive asset to invest in ahead of the Fed’s key interest rate hike scheduled for March.
The pound sterling has also gained a dominant position among the safe-haven assets. Analysts do not recommend investing in the yen, the euro, and the franc. The fact is that this year, the central banks of Japan, the EU, and Switzerland are likely to stick to dovish monetary policy. In addition, there is a risk that the regulators may decide not to raise the benchmark rate.
Thus, the Bank of England has chosen its own path. Not so long ago, the regulator raised the key interest rate twice for the first time since 2004. The central bank is highly likely to keep its hawkish stance amid surging inflation. If the predictions come true, the British pound will have every chance to compete with the greenback.
At present, both the US dollar and the Swiss franc are showing bright prospects for growth. If the Federal Reserve hikes the interest rate, the greenback may advance by 3%-5% against the euro.
Economists also emphasize a traditionally strong position of the Swiss franc. The currency’s appreciation could be explained by a stable social and economic situation in the country and its leading role in the global financial system.
