Now we're through the big French election risk, and the high likelihood of Macron winning through, Barclay's says this might also open the gate for further GBP gains
"The first round of the French elections supports the likelihood of Emmanuel Macron, becoming the president which should remain broadly supportive to the EUR, EM and risk assets, and should also confirm the recent appreciation path of GBP."
"In this environment, GBP appreciation would likely continue as the UK election is increasingly viewed as reducing UK political uncertainty...Despite last week's appreciation, GBP remains about 9% cheap on a real effective exchange rate basis,"
They also point to Friday's first UK Q1 GDP release as being key.
"We and consensus expect a 0.4% q/q increase, which implies 2.1% y/y,"
Today, the quid looks far from ready to spring another step higher but while we hold the 1.2770 support again, it gives buyers hope again.
