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UK election scenarios and what’s next for GBP? – BAML

“The House of Common’s last night authorised a 12 December UK general election” reports Bank of America Merrill Lynch Global Research discusses GBP outlook ahead of next month’s UK elections.One unambiguous conclusion, and our preferred way to express a view on GBP is to expect higher volatility over the coming month in the run up to election day.For choice, we think GBPUSD could struggle to sustain a break above 1.30 in the run up to the election.Assuming the legislation passes through the House of Lords today then we examine the economic impact of three scenarios for that election result: “An unprecedented fourth general election in nine years provides a large body of evidence on how FX markets are likely to react pre and post the election.

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