Societe Generale FX Strategy Research notes that while GBP has continued to be supported by resilient economic data, uncertainty still drags on.
"The risks to the economy remain huge and when we weigh a very bearish consensus against those risks, we conclude that GBP/USD will remain in the current range for the foreseeable future," SocGen argues.
For the EUR SocGen believes that going into the French elections, the currency is more like a 'coiled spring' than anything else.
"A Marine Le Pen win would be bad for the euro, of course, and probably drag EUR/USD below parity in short order. But any other result is likely to support it. A rally would be slower than a Le Pen-inspired plunge, but 1.10 is likely quite quickly and we don’t rule out a very sharp spike higher later this year," SocGen adds.
GBP/USD is trading circa 1.2511 and EUR/USD is trading circa 1.0611 as of writing.
Source: Societe Generale Cross Asset ResearchOriginal Article
