GBP and the pricing of uncertainty – RBS

Paul Robson, Research Analyst at RBS, suggests that the GBP sentiment looks to have been driven by political and economic uncertainty.

Key Quotes

“Real estate prices and a dip in consumer confidence have most recently been the focus for the latter, while the Conservative leadership contest has dominated the political space in recent weeks.

GBP looks to have rallied on perceptions of reduced uncertainty. How markets see the relative probabilities of a second referendum, parliamentary vote and/or General Election on this news is important for GBP. As expectations adjust, we expect GBP to weaken further (Short Cable, target 1.20).”