The upcoming parliamentary elections in the UK on May 7th have already sent shivers and the pound could not sustain the moves against the euro and the dollar, despite a recent recovery.
What’s next for sterling? Here is the view from BNP Paribas:
Here is their view, courtesy of eFXnews:
The relationship between the UK election outcome and sterling is not linear or straightforward, particularly given that the policies associated with each potential coalition could yield various and conflicting undercurrents for sterling, notes BNP Paribas.
“In the weeks ahead, the competition between parties could lead simply to an increase in GBP volatility alongside short sterling positioning, as has been the case in past political events. The risks are high for a directional move, given the level of uncertainty around the composition of the election outcome,” BNPP projects.
“Our positioning indicators suggest some scope for further downside. We would look for further weakness and, beyond that, opportunities to enter into long positions,” BNPP advises.
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