Sterling has priced in a substantial amount of positive news surrounding the economy and financial sector which will lessen the potential for further buying with tough GBP/USD resistance above 1.5950. The Bank of England interest rate decision to leave rates on hold is a small net negative for Sterling at this stage. The overall global risk profile is also likely to be less supportive of the UK currency. Losses should still be measured in the near term, especially given a lack of confidence in fundamentals for other major economies. Overall, there is likely to be gradual depreciation with firm GBP/USD support on any dips to the 1.5730 area.
Sterling was unable to break above resistance in the 1.5960 area on Wednesday and dipped to lows near 1.5820 on Thursday before finding support.
There were no surprises from the Bank of England with interest rates held at 0.50% while the amount of quantitative easing was also unchanged at GBP200bn.