EUR/GBP daily
Goldman Sachs maintains a constructive stance on sterling, despite its vulnerability to risk-off events.
Their bullish outlook stems from several factors:
- The headwinds that burdened the sterling in 2022, including high natural gas and energy prices, Brexit-related complications, and the relative stance of BOE policy, have all lessened, leading them to recommend staying short on EUR/GBP with a target of 0.86.
- The BOE's recent significant forecast upgrades to growth and inflation suggest a risk of more persistent inflation that would necessitate further monetary policy tightening.
- The BOE's policy stance no longer appears as an outlier in the G10, turning the previous negative influence on the currency into a positive one.
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