GBP: To Stay Supported; Still 11% Undervalued – Barclays

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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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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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