The British Pound has been one of the most heavily sold currencies in 2015, and forex traders are still waiting for an indication that these bearish trends have run their course. But when we look at the British economy from a broader perspective, there is a clear case that can be made for further weakness in cable. Specifically, consumer inflation levels have fallen to their lowest levels in recent memory — and this is likely to prevent the Bank of England from increasing interest rates any time in the near future.
This is not something that can be said of the United States, where rising employment and consumer spending has put upside pressure on consumer inflation. because of this, the Federal Reserve is much more likely to start raising interest rates before the end of the year when we compare the outlook that is now expected at the Bank of England. These differences in the potential for yield advantage should continue to support the greenback and drive down valuations in the GBP/USD.
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