Strategist: The pound faces temporary selling pressure but can quickly recover its previous gains.

Convera strategist George Vessey pointed out in a report that the British pound faces temporary selling pressure due to investors rebalancing their portfolios at the end of the month. He stated that the strong performance of the pound so far this month makes it vulnerable to end-of-month fund flows. However, Vessey believes that the pound may quickly recover its previous gains and could rise to 1.40 by the end of the year. This expectation is based on the continuation of "selling the dollar trades", with supporting factors including declining confidence in US policy making and deteriorating US economic prospects. This appreciation also requires the UK economy to remain resilient, and for the Bank of England to maintain a cautious approach to interest rate cuts.