Goldman Sachs: outlook for GBP
According to strategists at Goldman Sachs, GBP/USD will hit $1.6800, $1.6900 and $1.6500 in 3, 6 and 12 months.
"The UK has experienced a substantial improvement in activity indicators in recent months. Part of this may be related to a recovering Euro area economy and part linked to the acceleration in credit growth. The composite PMI stands at close to the highest level since the mid-1990s. This economic strength will likely support capital inflows, which would offset some of the external vulnerability linked to the relatively large current account deficit," they explain.
However, Goldman believes that pound's ability to strengthen versus the euro is limited. Analists expect EUR/GBP to trade at $0.8200, $0.8300 and $0.8500 in 3, 6 and 12 months.