GBP/USD likely to trade around 1.40-1.50 in medium term, says Lloyds Bank

The British pound has performed quite strongly in recent weeks, surging in response to the Prime Minister’s decision to seek a snap election, noted Lloyds Bank. In the past month, the GBP has been the best performing currency amongst the majors, appreciating by almost 5 percent against the USD to a six-month high just below 1.30.

There is a possibility of the British pound appreciating further in the coming weeks, especially if the election result is seen as bolstering the hand of the PM in the forthcoming negotiations of Brexit, stated Lloyds Bank.

However, there is wariness that uncertainty regarding the talks, along with the prospect of a rise in U.S. interest rates next month might restrict the upside. Moreover, U.K. economic data have been coming mixed lately.

“We remain generally constructive on the medium-term outlook for the pound, with fair-value estimates for GBP/USD centred around 1.40 – 1.50”, added Lloyds Bank.