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The pound has been on the move but it struggles to advance beyond 1.30. What’s next? Here are reasons behind  sterling’s rise.

Here is their view, courtesy of eFXnews:

Nomura FX Strategy Research expects  GBP to outperform throughout the second half of the year.  

Nomura outlines 3 reasons behind this view:

1)  The inflation premium in GBP is starting to look over-stretched;  2)  The Bank of England (BoE) may start to become less pessimistic if a positive global growth surprise catches the UK markets off-guard;  3)  The difficulty of the early stages of the Brexit negotiations looks to be priced in already with the small drawdowns this week further proving that,” Nomura argues.

In line with this view,  Nomura recommends going long GBP against USD, EUR, and AUD.

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