Sterling's recent rise against the euro appears driven by a short-squeeze due to a lack of new negative political developments, Societe Generale analysts say in a note. That means traders who were previously betting against sterling are buying back the currency as it rises. U.K. politicians are careful not to scare the market since former Prime Minister Liz Truss caused turmoil with unfunded tax cuts, the analysts say. Sterling is now a "little stretched" relative to the euro but "not significantly out of line," suggesting modest softness from here, they say. SocGen expects the euro to rise to 0.87 pounds by year-end. The euro falls 0.2% to 0.8552 pounds, having reached a one-year low of 0.8544 Thursday, LSEG data show. (renae.dyer@wsj.com)