UK chancellor says that it is better to take fiscal support for the economy off to late, rather than too early. This is clearly the view in the US as well. While it makes sense to Keynesian policymakers, it is braodly opposed by inflation hawks who see the combination of out-sized government spending and loose monetary policy inevitably leading to hyper-inflation.
For months, the pound and dollar have slumped together on the above concerns but the tide has turned in favor of the pound as traders, investors and corporations are scrambling to cover positions which assumed a weaker pound for the foreseeable future. We consolidate now in the 1.6580 area.