GBP: Into & Beyond The June-8 Elections – Credit Agricole

The British pound is moving on every opinion poll[1] related to the elections. What’s next?

Here is their view, courtesy of eFXnews:

Credit Agricole CIB FX Strategy Research expects the Conservatives to extend their parliamentary majority as a result of the 8 June election, strengthening PM May’s position ahead of the Brexit negotiations.

“Median polls since the election was called have pointed to gains in excess of 70-80 seats. Confirmation of that could help GBP revisit its recent highs against both USD and EUR,” CACIB argues.

However, in the very near-term, CACIB remains cautious in its short-term GBP outlook, citing a non-negligible risk that the Conservatives may fail to meaningfully extend their majority.

Beyond the UK elections, CACIB expects the UK economic outlook to deteriorate from here, keeping the BoE’s easing stance firmly in place, and continuing to weigh on GBP,’ CACIB argues.

GBP/USD is trading circa 1.2880 of writing.

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