The exchange rate of the pound/dollar pair rose to the level of 1.3860.
According to economists at Mizuho Bank, in early September, the pound will move without a clearly defined direction, although it may fall in the middle of the month due to political and economic trends in the UK. Some problems can attract attention and cause political unrest. The coronavirus situation has led to labor shortages and logistical chaos in the UK this summer. At the same time, the scheme of protection against dismissal, when the state pays part of the salary so that people can work, will be curtailed at the end of September. The political authority of Prime Minister Boris Johnson has been shaken after the resignation of Health Minister Matt Hancock and attacks on Johnson by former special Adviser Dominic Cummings. This could potentially become an unstable factor for the pound. Another important factor for the pound will be the upcoming meeting of the Bank of England. According to forecasts, the British regulator will announce a reduction in the quantitative easing program from the end of the year. This event is mostly already embedded in the current prices, but nevertheless, we should expect a slight strengthening of the pound after the actual announcement of the news. At the same time, it is unlikely that the British currency will be able to quickly return to recent highs, as demand for the dollar remains high.
The forecast expects a decline in the pound/dollar exchange rate to the levels of 1.3840, 1.3820 and 1.3800.