Gajan Mahadevan, Research Analyst at Lloyds Bank, suggests that after a decline of almost 11% since last November, GBP has shown some signs of improvement. Key Quotes “GBP/USD has had mixed fortunes over the past month. The currency pair fell below 1.39 for the first time since 2009, as expectations of future UK interest rate rises were pushed back and uncertainty surrounding the EU referendum kept the GBP on the back foot. However, pressure on the pair subsided in the important 1.40 to 1.35 range – a region which it has not been below since 1985. From the end of February, an improvement in global risk sentiment has seen GBP/USD recover back above 1.42. In the short-term, we expect the pair to experience a period of consolidation - we forecast 1.40 for end Q1 and 1.44 for end Q2. However, beyond the uncertainty in the coming months, GBP/USD should rally back towards fair value, which is estimated around 1.47 by end-2016, with further strength tempered by possible US interest rate hikes.” For more information, read our latest forex news.