GBP/USD set to move closer to the 1.30 level this year – MUFG

GBP bullish trend remains firmly in place but not without downside risks in week ahead, economists at MUFG Bank report.

A weaker UK CPI and push back from BoE against amount of hikes priced in would be worst outcome for GBP

A weaker UK CPI report and/or a BoE policy update that fails to fully meet lofty expectations for higher UK rates pose the main downside risks to the GBP’s bullish trend. 

We still expect Cable to move closer to 1.3000 this year. A full reversal of the GBP sell-off following the outbreak of the Ukraine conflict could even see the pair extend its rebound further back towards the 1.3500 level where it was trading in early 2022.