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The GBP/USD pair is set to advance nicely along with EUR/USD according to economists at ING. A delay to the last stage of reopening due to the spread of the Delta variant of COVID-19 would have a limited impact on the UK economy. Additionally, the pound is less vulnerable to a positioning squeeze now.

See:  EUR/USD set to surge above the 1.25 level – ING

“Freedom Day” delayed, only a pushback of the timetable

“With EUR/GBP stuck around the 0.86 level, the GBP/USD price action is all about the direction of EUR/USD. Our view for a gentle rise in EUR/USD should translate into higher GBP/USD.”  

“On the GBP side, the economic reopening and fast vaccination stories are fully priced in. While the spread in the Indian variant makes it likely that the 21 June restriction easing will be postponed, the impact on the economy should be very limited (with the delay likely being a matter of weeks).”  

“GBP speculative longs no longer stand out among G10 peers and should make GBP less vulnerable to the positioning squeeze, mainly in terms relative to others (such as EUR, CAD and NZD).”