GBP’s bullish trend to reverse in year ahead – MUFG

Market news

2 August 2023

GBP’s bullish trend to reverse in year ahead – MUFG

The Pound continued to strengthen in July hitting fresh year-to-date highs against the US Dollar and Euro. Economists at MUFG Bank analyze GBP outlook.

Turning point has not yet been reached

We believe that the Pound’s recent strong rebound is starting to lose some upward momentum.

Evidence of much weaker UK growth in the 2H of this year and/or a faster-than-expected slowdown in inflation will be required to trigger a reversal of Pound gains.

EUR/GBP – Q3 2023 0.8550 Q4 2023 0.8650 Q1 2024 0.8850 Q2 2024 0.8900

GBP/USD – Q3 2023 1.2870 Q4 2023 1.2950 Q1 2024 1.2770 Q2 2024 1.2360

EUR/USD Price Analysis: Further weakness remains on the table

USD Index Price Analysis: Next on the upside emerges 103.50

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