Societe Generale Strategists Warn of Potential Downward Pressure on GBP Against EUR

Societe Generale strategists have indicated that the British pound may face downward pressure against the euro due to its strong performance earlier this year. According to Jin10, the market had incorrectly anticipated significant interest rate cuts by the Bank of England, leading to excessive pessimism about the UK economy. This misjudgment has recently been corrected, weakening support for the pound. Additionally, they noted that growth expectations in the eurozone are rising relative to the UK, and historically, the EUR/GBP exchange rate tends to follow this difference in growth expectations.