Strategist: The pound is facing temporary selling pressure but can soon recover its previous rise.

On May 30, Convera strategist George Vessey pointed out in a report that the pound is facing some temporary selling pressure as investors rebalance their portfolios at the end of the month. He said the pound's strong month-to-date performance made it vulnerable to month-end flows. However, Vessey believes that the pound may soon resume its previous rally, and is expected to rise to 1.40 by the end of the year. This expectation is premised on the continuation of the "dollar sell-off", which is supported by declining market confidence in US policymaking and a deteriorating outlook for the US economy. Such an appreciation would also require the UK economy to remain resilient and the Bank of England to be cautious about cutting interest rates.