The past week has seen a bearish trend for the GBP/USD pair, as the rate has lowered somewhat. It has now reached its lowest point since last March for even the best GBP to USD exchange rate. Its highest point this year, in July, was a whole 7.6% higher. The main reason for this dip is the strength of the dollar, as the US dollar index has risen.
So, we will discuss the GBP to USD forecast for 2023 in this article.
The pair immediately moved after the publishing of strong US economic data to do with durable goods orders. The number of these orders increased to 0.2% this past August.
Due to the overwhelming signs pointing towards inflation recently, traders have been flocking to the currency. Therefore, the dollar’s use as a safe haven is becoming more relevant as of late. Additionally, the signals from the Fed point towards interest rates remaining high, staying at 5.25% to 5.50%. There might actually be a further rate hike going up 25bps.
Dollar Strengthens, BoE Holds Rates, and GBP/USD Outlook
The dollar has reached around $106.76 on the index. This price point is over 7% higher than its lowest point this year and is a level it has not surpassed since November last year.
Meanwhile, the BoE is making similar moves in the short term. It is reportedly leaving interest rates as they are. However, another hike seems unlikely. The ONS has shown that inflation will be reduced these coming months, so a hawkish mood is unnecessary. Another hike is especially unlikely due to the poor performance of the UK economy in general. More rate increases will likely hurt. The disparity in the two policies indicates that further GBP/USD rate movements may be downward. The GBP/USD forecast long-term and short-term is poor.
Now the formation of a death cross pattern does not bode well for the sterling in terms of GBP/USD technical analysis. We can see this pattern by looking at the 50 and 200-day WMA. So analysts predict further falls for the best GBP to USD exchange rate in the coming weeks.
