Pound-Dollar Rally Faces Rebate Demand Test
The Pound-Dollar exchange rate (GBP/USD) has been on an upward trend since Monday, recovering from levels below 1.3290 to around 1.3440 on Thursday.
This rally was fueled by post-Fed Dollar weakness and the Pound's muted reaction to the Bank of England's decision.
However, Barclays' month-end model suggests that this recovery may be short-lived due to portfolio rebalancing flows.
The bank's model indicates moderate US Dollar buying against the Pound Sterling, driven by the outperformance of equities in Canada and the UK.