GBP: 3 Reasons For Downside Risks But Won’t Fight Against N-Term Strength – Barclays

Barclays Capital FX Strategy Research comments on GBP direction in the aftermath of today's BoE meeting in which the central bank maintained a 7-2 vote in favor of keeping the policy unchanged.

"We maintain conviction in modest GBP appreciation over the forecast horizon and would not fight against GBP strength in the very near term. However, we think risks are skewed to the downside from current levels," Barclays projects.

Barclays outlines 3 reasons behind this view:

>"The degree of conditionality to data developments in the BoE’s statement introduces downside risks to GBP.

>>Political risks around Brexit remain skewed to the downside for GBP, in our view.

>>>The recent upside inflation surprise in the US adds to risks of a retracement in cable," Barclays argues.

Source: Barclays ResearchOriginal Article