Gbpeur To Move Higher Barclays

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Gbpeur To Move Higher Barclays

Gbp/Eur To Move Higher - Barclays

The GBP/EUR is trading at multi-week highs near the 1.1850 handle. The market's risk appetite has also improved after the US and China agreed on a tariff pause for 3 months.

According to Barclays, the improved trade relations between the UK and the EU, along with the UK bond yields, will be beneficial for the GBP/EUR. All of this hints at more upside for the GBP/EUR with a forecast of 1.2050.

Boe Gives Hawkish Signals

The Barclays also added that the BoE has been hawkish as of late. So, that's also a key reason that supports a surge in the GBP against other currencies, including EUR.

The recent comments from a BoE member warned about the risks related to inflation trends and wages. He added that deceleration over a long period is what will make the BoE comfortable.

Looking ahead, it will become difficult for the BoE to cut rates at a fast pace if the deflation trend becomes weak. After all, the only reason the Bank of England is cutting rates is after the confirmation that inflation is indeed coming down.

So, what happens if the inflation stops moving lower or starts to tick higher? In that case, the BoE will have to delay the rate cuts for a few more months.

Barclays also commented on how the UK is expected to reach a positive trade deal with the USA. Meanwhile, the Summit between the UK and the EU is also expected to bring positive news.

With all things considered, it is only fair to think that the Pound will move higher against the Euro. In fact, this move will bring the GBP/EUR pair towards the fair value.

Barclays belevie that the fair value for the GBP/EUR is around 1.19 - 1.2050. Meanwhile, the Barclays bank is also bullish on the GBP/CHF.

This is a sign that Barclays is bullish on the GBP across the board. This includes other currencies such as CHF, EUR, and more.

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