GBP: Barclays Analysis

Barclays

Foreign exchange analysts at Barclays are optimistic about the medium-term prospects for the british Pound (GBP), citing potential changes in the political landscape and improving uK trade Relations.

The key factor, according to experts, is the possibility of a Labor government coming to power, which is expected to take steps to reset relations between Britain and the European Union after Brexit.

В своем еженедельном обзоре Barclays подчеркивает, что недавние позитивные новости в сфере торговли также оказывают поддержку фунту. В частности, аналитики отмечают прогресс в заключении торгового соглашения с США, а также потенциальный саммит между ЕС и Великобританией, посвященный «перезагрузке Брексита».

“There is also positive news on the trade front, both on the trade deal with the US announced last week and on the EU-UK Brexit Reset summit,” the survey said.

These developments, according to Barclays, create favorable conditions for further convergence of exchange rates to levels more consistent with interest rate differences and the VIX volatility index. Analysts predict that the EURGBP pair may decline to levels of 0.83-0.84.

“These developments provide grounds for further convergence to levels more in line with the percentage differences and the VIX (around 0.83-0.84 in the EURGBP pair),” the analysts add.

In conclusion, Barclays reiterates its position on the British currency: "We maintain our bullish view on sterling."

Key conclusions:

  • Barclays Optimism for the pound:Analysts see potential for GBP growth in the medium term.
  • Labor and the Brexit reset:Expectations surrounding Labour's eventual rise to power and its plans to improve relations with the EU are a key driver of optimism.
  • Trade agreements:Progress on a trade agreement with the US and a potential summit with the EU are also supporting the pound.
  • EURGBP Forecast:Barclays expects the EURGBP pair to decline to levels of 0.83-0.84.

Important to note:

This article is based on analysis from Barclays and reflects their views. Investors should consider various factors and conduct their own research before making investment decisions. The foreign exchange market is subject to high volatility, and forecasts may not come true.

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