Credit Agricole CIB's global FX chief Andreas Koenig said the firm has become
more positive on the pound over the past month, citing market worries about
French fiscal strength that have pressured the euro. Sterling rose more than 1%
versus the euro last week, its largest weekly gain since March, after heavy
selling in French sovereign bonds amid doubts over Paris's ability to trim the
deficit. Koenig added that technicals and prior negative sentiment toward the UK
— including budget and political uncertainty — mean signs of fiscal prudence
from politicians would be relatively supportive for the pound, which has gained
momentum as the euro weakens.
