GBP/USD: Next leg higher not happen until next year – CIBC

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Analysts at CIBC argue that the Pound is waiting for the next political move. They see don’t see a move significantly higher in GBP/USD during the current year. 

Key Quotes: 

“A few months ago, negative positioning against sterling suggested that a no-deal Brexit may, at that stage, have been the base case for currency traders. Recent developments, including a slide in the opinion polls for the Brexit Party, has led to a paring of those short positions and now the base case appears to be for an orderly exit by January 31st.”

“Next month’s election could still cause uncertainty and potential volatility for sterling, particularly if the conservative party gives up some of its recent lead in the polls. As such, we expect the next leg higher in GBPUSD to not happen until next year, assuming there’s some clarity on the UK’s relationship with the EU following the election and the new January 31st deadline.”
 

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