The UK has shown signs of improvement with the unemployment rate hitting the lowest level in 4 years. The housing market cooled on the back of tougher mortgage market requirements, reducing the need for an immediate rate hike.The key risk event for GBP/USD in 2015 is the May general election that may produce an inconclusive result, so the BOE is unlikely to lift the interest rate before that. With the BOE expecting inflation to slow further, we won't be surprised if the UK central bank doesn't lift the rate until late 2015. Cable is expected to hit 1.54 in H1 2015 and will possibly reverse its decline in the latter half on BOE rate hike hopes to hit 1.58.
The material has been provided by InstaForex Company – www.instaforex.com