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Investing.com - UBS has maintained its forecast for the British pound against the US dollar (GBP/USD) despite acknowledging ongoing political and fiscal risks in the United Kingdom (TADAWUL:4280).
The Swiss banking giant noted that the GBP/USD dip in mid-June demonstrated that the UK has not yet resolved its political and fiscal challenges. While the currency quickly recovered after government intervention to stabilize markets, UBS analysts believe some of the damage remains difficult to reverse in the short term.
UBS expects the UK’s fiscal situation to remain a primary concern for currency traders, with the potential for renewed volatility in the future. Despite these challenges, the bank believes policymakers will work diligently to address market concerns.
The financial institution predicts that other macroeconomic factors will support the pound’s upward trajectory against the dollar in the coming months. This view aligns with UBS’s broader forecast of US dollar weakness later this year, though it acknowledges a potential consolidation phase during the summer months.
UBS has decided to leave its GBP/USD forecasts largely unchanged, maintaining its previous outlook despite the recent volatility and ongoing risks in the British economy.
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