Ella 
GBP/USD will continue its bullish momentum next year, rising to 1.3500, Goldman Sachs’ global head of FX said in his latest report, citing GBP/USD’s correlation with equities and fading fears of a global recession.
Sterling “has a strong positive correlation with rising stock prices”.
Some of the pound’s recent gains are of course related to a weaker dollar, but trade-weighted measures of the pound have also strengthened since early November, as the pound tends to perform particularly well in an environment where interest rate volatility eases and equity prices rise.
This has been the backdrop since early November this year, and more is expected to be the case in the year ahead. This is why we think the pound is one of the currencies with more room to appreciate as markets embrace the idea of a “soft landing” for the economy.
The approach to the UK general election is likely to encourage the UK to introduce more fiscal support and to some extent reduce the UK’s trade friction with the EU, both of which should help support domestic economic growth, help avoid the risk of recession, and boost the pound.
