British Pound: Outlook shifts from bearish to neutral – OCBC
OCBC's strategists Sim Moh Siong and Christopher Wong shift their British Pound (GBP) view from bearish to neutral, citing easing fiscal concerns and attractive carry that have helped GBP recover from early May losses. Despite soft United Kingdom (UK) data and ongoing political risks, including potential Labour leadership changes, the bank expects stretched short positioning and possible lower Oil prices to limit GBP downside.
Neutral stance on the Pound
"We shift from bearish to neutral on the GBP and revise our end-2026 EUR/GBP forecast to 0.87 from 0.89."
"Politics remains a key focus. A potential win for Andrew Burnham at the 18 June Makerfield by-election could trigger a Labour leadership contest in late August or early September. Burnham is widely seen as a likely successor to Prime Minister Keir Starmer according to recent YouGov polling."
"Despite soft UK data and ongoing political risk, GBP has recovered from early May losses."
"Easing fiscal concerns, supported by Burnham’s commitment to discipline, and relatively attractive carry have helped stabilise the currency."
"Positioning also matters. Elevated GBP shorts could unwind further, especially if oil prices ease, which tends to support risk-sensitive, oil-importing currencies like GBP."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Morgan Stanley declares that physical AI and space will become the “new electricity” of the economy! Increases holdings of SpaceX (SPCX.US), target price $300
Morgan Stanley has released a research report on physical AI, space, and SpaceX (SPCX.US), stating that robotics and the space industry will reshape the global economic landscape, with their impact comparable to that of electricity in modern economies.
ECB Vice President sounds the "bubble alarm": AI asset valuations are "very high," stock markets are prone to corrections
European Central Bank Vice President Vujičić warns: Asset rallies driven by artificial intelligence are prone to correction risks.
Broadcom (AVGO.US) CEO Responds to "AI Brakes" Theory: AI Semiconductor Revenue Target Remains Unchanged, Aiming for $230 Billion by 2028
Chen Fuyang recently addressed concerns during an interview about the potential impact of slowing frontier AI model development on the chip manufacturer's business, emphasizing that the company remains committed to its long-term revenue targets.
10-year U.S. Treasury yield breaks above 5% to nearly a 20-year high, Fed's anti-inflation credibility faces major test
The yield on the US 10-year Treasury has risen to its highest level in nearly 20 years, marking the latest milestone in the global bond sell-off.
Crypto prices
More
