The British currency fell against the dollar to the level of 1.3790.
The fall further pushed the market away from multi-week highs reached in response to a weak employment report on Friday, and was caused by a number of factors. The US dollar continued to recover from monthly lows against the background of a strong positive movement in the yield of treasury securities. In fact, the yield on benchmark 10-year US government bonds exceeded 1.36% amid expectations that the Fed may begin reducing its stimulus introduced during the pandemic as early as November. Michael Saunders, a member of the Bank of England's monetary committee, noted yesterday that if bond purchases continue in full at 4% inflation, this could become a problem. Saunders also said that the Central Bank may raise the rate no earlier than in a year, and the change will be insignificant. Market participants expect that at the next meeting in September, the regulator will more accurately outline its plans for easing monetary policy. The volume of securities is expected to decrease from the end of 2021 or from the beginning of 2022.
The forecast assumes a decline in the pound/dollar exchange rate to the levels of 1.3770, 1.3750 and 1.3725.