Pound: Optimism supports growth amid risks – MUFG
|The Pound has shown strength, with GBP/USD rising to 1.3683, approaching last year's high. This upward momentum follows stronger than expected UK PMI surveys, indicating improved business confidence. However, political risks remain a concern, particularly surrounding the Labour Party's by-election strategy and potential leadership challenges for Prime Minister Starmer, which could impact the Pound's stability. MUFG Senior Currency Analyst Lee Hardman notes.
Political risks linger despite growth optimism
"The pound’s upward momentum was triggered by the release of the much stronger than expected UK PMI surveys on Friday alongside the broad-based US dollar sell-off."
"We continue to believe that the local elections pose downside risks for the pound, and are not convinced that stronger growth will prevent the BoE from lowering rates further this year if inflation falls back closer to target as we expect."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.