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Investing.com - UBS has adjusted its EUR/GBP forecast higher, citing persistent UK political and fiscal risks that have recently pushed the currency pair to test the 0.87 level again.
The EUR/GBP has been trading in a very tight range for some time, but UK-specific challenges have influenced recent movements, according to UBS. The bank does not expect these political and fiscal risks in the United Kingdom (TADAWUL:4280) to diminish in the near future.
Earlier this year, German fiscal spending provided support for most European currencies, including the British pound. UBS expects this trend to continue but now anticipates modest upside potential for the EUR/GBP pair extending into 2026.
The bank has revised its forecasts to reflect this updated outlook, projecting that EUR/GBP will remain around current levels in the coming months. The adjustment indicates a slight upward trajectory for the currency pair.
UBS now forecasts the EUR/GBP to edge slightly higher in 2026, representing a modest change to its previous outlook based on the ongoing economic and political factors affecting both currencies.
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