The Pound Sterling (GBP) was the best performing G10 currency in January. Economists at Rabobank analyze GBP outlook.
Potential for GBP to break moderately higher vs. the EUR this year
While we see scope for Cable to dip again near-term as the USD continues to reduce its Fed rate cut hopes, we expect GBP/USD to end the year close to 1.3000.
EUR/GBP is currently positioned close to the bottom of its range. While we expect that the 0.8500 level will offer strong support, we see scope for a break below in the latter part of this year, targeting 0.8400 on a 6-to-12-month view.
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