Mitsubishi UFJ: Further Large Gains in the Pound Are Unlikely

According to Jin10, Mitsubishi UFJ Bank's Lee Hardman said the pound is unlikely to rise much further, despite higher U.K. real yields adjusted for inflation and easing fiscal concerns. He said that after the recent strong rally, the market has already priced in a lot of good news for the pound, which will limit further upside. Hardman said energy prices rose on U.S.-Iran conflict-related concerns, pushing up British bond yields. He also said incoming Prime Minister Andy Burnham has promised fiscal responsibility, easing initial concerns about political risk, and reports say Burnham will appoint Home Secretary Shabana Mahmood as chancellor, which may further ease worries about the fiscal situation.