After hitting highs above 1.2850 this month, the Pound to Dollar (GBP/USD) exchange rate has retreated gradually to 5-week lows below 1.2650. Nordea sees further downside risks as the Fed is unable to cut interest rates with a GBP/USD retreat to 1.23 at the end of 2024 compared with the previous forecast of 1.29. Nordea remains concerned over the underlying US inflation trends, especially with the economy still performing well and the labour market still robust. It considers that the Fed will need increased confidence over inflation or a weaker labour market to sanction policy easing, but does not see this happening ... (full story)