Investors are keeping a close eye on the EU summit and the BoE policy meeting, both of which take place later this week. What is the outlook for GBP for this week?
Here is their view, courtesy of eFXdata:
Credit Agricole CIB Research discusses GBP outlook this week, and maintains a bearish bias expressing that via holding a short GBP/USD from 1.27 targeting a move towards 1.20.
“We believe that the GBP remains very vulnerable and we expect the headwinds for the currency to intensify from here. In that, we think that this week could become a focal point for GBP-bearish sentiment. On 18-19 June, the EU summit will have to deal with the question of the stalled Brexit trade negotiations. We expect little to no progress, however, and think that growing no trade deal Brexit fears could add to the headwinds for the GBP,” CACIB notes.
“Moreover, on 18 June, the BoE is expected to announce an extension of its QE programme and could discuss negative policy rates…Potential disappointments from the UK data this week (labour data, CPI and retail sales) could further add to the selling pressure on the currency. We remain short GBP/USD,” CACIB adds.
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