The GBP has remained relatively stable following the UK election results, despite the lack of significant movement. However, the recent decline in the value of the USD has allowed the GBP to emerge as the best performing G10 currency so far this year, according to senior FX strategist at Rabobank, Jane Foley.
Foley predicts that the GBP/USD pair will continue to trend higher in the months to come. Despite the lack of reaction to the election results, Foley believes that the GBP can maintain its gradual recovery as UK politics steer clear of the uncertainties surrounding Brexit, Johnson, and Truss.
Following the strong parliamentary majority won by Labour, Foley notes that the party only saw a slight increase in its share of the national vote. The future performance of the GBP will depend on Labour’s ability to deliver on promises of growth and improved living standards, which will be closely monitored by both markets and the electorate.
Looking ahead, Foley expects the EUR/GBP pair to decline towards the end of the year, with opportunities to sell on rallies to 0.85. She anticipates that the GBP/USD pair may experience fluctuations due to uncertainties in US politics and Fed policy but ultimately expects it to move within a moderately higher range in the coming months.
It is important to note that the information provided contains forward-looking statements and comes with inherent risks and uncertainties. Readers are advised to conduct their own research before making any investment decisions. The views expressed in the article are those of the author and do not necessarily reflect those of FXStreet or its advertisers.
In conclusion, while the GBP may have shown a limited reaction to the UK election results, the currency’s performance against the USD and other factors point towards a potential upward trajectory in the near future. Investors should remain cautious and stay informed about market developments to make well-informed decisions in the ever-changing landscape of the foreign exchange market.