Positive investor sentiment could drive the Pound up this summer..
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| Whilst GBP v EUR is expected to perform sideways by the vast majority of commentators in the near-term, the summer could provide some decent upsides.
"My view is the path of rates is still downwards but it is going to be very gradual and very careful" was the headline quote from BoE Governor Bailey yesterday.
Nothing new here I suppose, but extra emphasis and the doubling on 'very' was enough to warn economists the stance of 'higher rates for longer' remains. This underpins GBP and gives it a free shot next month where there is no BoE meeting.
As global risks ease somewhat, the Pound should improve as a beta currency. Good weather will play a part in the UK as consumers spend more money (as a services nation this is critical for GDP growth) and August sees the lowest liquidity in the market due to holidays, so volatility should be low.
All of a sudden, it looks like Sterling is in for a good summer. But don't be fooled, something from somewhere will be sure to knock the good vibes and take GBP down (probably).
The Autumn is the one to watch out for with the UK Government taking centre stage with its budget and controlling of debt (good luck to us all).. |
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