Barclays Capital Research continues to see reasons for further medium-term GBP appreciation, supported by positioning and valuation.
However, going into the UK June-8 elections, Barclays expects the currency upside to remain capped in the near-term.
“While polls continue to indicate a Conservative Party win in June, the margin of the victory has recently narrowed (eg, YouGov/The Times), introducing near-term downside risks for GBP. Moreover, last week, revisions to Q1 GDP data suggested a marked slowdown in UK consumption,” Barclays notes.
GBP/USD is trading circa 1.2855 as of writing.
Source: Barclays Research
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