Amundi Bullish on Pound Amid Euro Weakness and UK Fiscal Discipline

Amundi Asset Management, Europe's largest asset manager, has adopted a more favorable outlook on the British pound. This shift comes as concerns over France's fiscal situation have weakened the euro, prompting investors to seek alternatives. Last week, sterling surged over 1% against the euro, marking its most significant weekly gain since March. The pound is currently trading around 84.76 pence per euro.

Andreas König, head of global FX at Amundi, noted that sterling has become an attractive option due to its recent technical situation and the political changes in the UK. He emphasized that market sentiment improves when politicians demonstrate fiscal responsibility, which has contributed to sterling's recent strength. Amundi has adjusted its position to slightly overweight the pound against other major currencies.

Britain's new finance minister, John Healey, has announced that fiscal discipline will be central to his first budget on October 28. This commitment to fiscal responsibility aligns with the positive market sentiment surrounding sterling.