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Jul 24 - 02:55 PM

GBP: Riding On The Coattails Of The Resurgent EUR; What's Next? - Credit Agricole

By eFXdata  —  Jul 24 - 01:30 PM

Credit Agricole CIB Research discusses GBP outlook and advises caution around current levels.

"The GBP has been riding on the coattails of the resurgent EUR for most of this past week, hitting a fresh multiweek high against the USD. The currency’s fundamentals have hardly improved of late, however, and we maintain our cautious outlook.

Indeed, the outlook for the UK economy remains challenging despite the Boris Johnson-led government’s recent fiscal stimulus. This keeps UK rates markets expecting negative rates in the coming months and this should remain a drag on the GBP from here," CACIB notes. 

"A looming confrontation – diplomatic and trade – with China could therefore add to the growing number of headwinds to the UK economic outlook," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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