GBP/USD has been on a bullish trend since this year. The bullish outlook for this pair has attracted investors to speculate on the possible target for this pair before the end of the year. Can this pair maintain its bullish trend till year end? What price targets are we to expect from this pair by the end of 2023? This work has offered useful insights for traders seeking to trade GBP/USD in the long term.
GBPUSD What you need to know about this pair
The GBP/USD represents the exchange rate between the British pound (GBP) and the United States dollar (USD). This major currency pair is one of the most traded currency pairs in the world today. GBP/USD stands out amongst the oldest currency pairs in the market and has been trading since the 17th century. The pair is often referred to as “cable” or “the pound”. The value of the GBP/USD is determined by supply and demand for the two currencies.
What Does the Future Hold for GBP/USD?
The GBP/USD exchange rate has been on a bullish trend since the beginning of 2023, and it is currently trading around 1.29150 in July. Many factors could influence the future direction of this pair. These includes:
The UK’s economic performance:
The UK economy is currently growing at a healthy pace, and this is likely to support the value of the pound in the short term. However, there are some factors that could limit this growth such as the ongoing war in Ukraine and the rising cost of living in the UK. These factors when not controlled could possibly put some downward pressure on GBP/USD.
The US economic performance: The US economy is also growing at a healthy pace, but the pace of growth is expected to slow in the second half of 2023. This could put downward pressure on the dollar, which could benefit the GBP/USD exchange rate.
Interest rates: The Bank of England (BoE) is expected to raise interest rates in the coming months, which could support the value of the pound. The US Federal Reserve (Fed) is also expected to raise interest rates, but the pace of rate hikes is likely to be slower than in the UK. This could put downward pressure on the dollar, which could benefit the GBP/USD exchange rate.
Some Predictions for the performance of GBP/USD
Here are some specific predictions for the GBP/USD exchange rate in the coming months and years:
July 2023: The GBP/USD exchange rate is expected to remain within the range of 1.28-1.30 in July as a result of the healthy outlook for the pound.
September 2023: The GBP/USD exchange rate is expected to rise further towards 1.32-1.35 in September, as the BoE continues to raise interest rates.
December 2023: The GBP/USD exchange rate might close the year with a new yearly high of around 1.36-1.38 in December, as the UK economy continues to grow.
Of course, these are just predictions, and the actual future direction of the GBP/USD exchange rate will depend on many factors. However, the overall outlook for the pair is positive, and it is likely to continue to appreciate in the coming months and years.
While the future looks bright for GBP/USD, investors need to avoid the danger of a single investment and consider other investment options. Here one can choose to buy shares from UK or invest in government bonds and derivatives as alternative investments while trading GBP/USD.