According to Jinshi Data, Barclays Bank recommends buying the pound against the euro and believes that the pound will climb to a two-year high as a solid economy and closer ties with the European Union will continue to support the pound.

The bank expects a raft of domestic data this week to show the economy is improving, which should boost sterling after a sharp sell-off so far this month.

Barclays strategist Themistoklis Fiotakis said last week's market correction may have diluted long positions in the pound and now provides a better level to re-enter the long position. They recommend shorting EUR/GBP with a reference point of 0.8550, targeting a slide to 0.8300, a level last reached in April 2022.

Barclays said it expects this week to be an important week for UK economic data, including employment, inflation and economic growth data, which will show that the UK economy is strong and support the Monetary Policy Committee's intention to gradually and cautiously advance interest rate cuts.