Synopsis:

SocGen sees GBP/USD largely tracking EUR/USD and EUR/GBP dynamics, with gains in the pair coming from EUR/USD strength rather than GBP-specific drivers. However, the UK’s fiscally driven growth slowdown could prompt hedging activity, limiting upside above 1.30. SocGen continues to see GBP as a sell against NOK and SEK.

Key Points:

1️⃣ GBP/USD Gains Driven by EUR/USD Moves 🔄

• The pair has risen more slowly than EUR/USD, leading to a gradual EUR/GBP uptick.
• GBP-specific factors are playing a limited role in recent FX moves.

2️⃣ UK Growth Risks to Cap Further GBP Upside 📉

• The UK’s fiscal tightening is expected to slow economic growth.
• As GBP/USD nears 1.30, investors may hedge long GBP exposure, limiting gains.

3️⃣ GBP as a Sell Against NOK & SEK 🇳🇴🇸🇪

• SocGen continues to favor selling GBP vs. NOK and SEK, citing relative economic resilience in Scandinavia.

Conclusion:

SocGen sees GBP/USD facing resistance near 1.30, as UK growth concerns could encourage hedging activity. With GBP movements largely dictated by EUR/USD trends, the currency remains a sell against NOK and SEK amid diverging economic outlooks.