Pound/dollar got a significant boost from the announcement about the elections on June 8th, unleashing a massive short squeeze. What’s next? There is a lot of room to go.
Here is their view, courtesy of eFXnews:
Barclays Capital FX Strategy Research expects the GBP to remain supported going into the snap UK general election but notes that global sentiment amid geopolitical risks is likely to stay a key driver in the near-term.
On the BoE front, Barclays doesn’t expect the central bank to signal any change in policy stance over this coming snap election.
“We currently estimate the GBP is about 11% below its long-term fair value on a real effective exchange rate basis. We expect much of this uncertainty discount to be removed over the next few quarters,” Barclays argues.
GBP/USD is trading circa 1.2780 as of writing.
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