The British Pound is trading above 1.3000 but still remains under a lot of pressure. Did it suffer too much?
Here is their view, courtesy of eFXdata:
Barclays Research discusses GBP outlook and argues that while GBP remains susceptible to headline risk but a lot of negativity is already priced.
“Despite the softness in June inflation and weaker retail sales, markets expectations for an August rate hike remain broadly unchanged.
We think price pressures coming from renewed momentum in input prices should continue to support inflation at or slightly above the BoE’s target, likely justifying a hike at the August MPC.
On the political front, we think a lot of the negativity is already reflected in sterling, with scope for some risk premium to be taken out as parliament heads for summer recess,” Barclays adds.
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