Analysts at MUFG Bank, closed their trade idea of long EUR/GBP pair. They point out the pound continues to defy bearish expectations. They warn that the Bank of England (BoE) meeting next week, could provide a fresh catalyst.
“The pound continues to perform better than expected in the near-term which has resulted in EUR/GBP falling back towards the 0.9000-level. Over the past week, EUR/GBP upside has been dampened by evidence of a stronger UK economic recovery while negative Brexit headlines have had little impact.”
“Broad-based USD weakness and improving global investor risk sentiment have helped lift he pound as well. While the BoE’s upcoming policy meeting could provide a fresh catalyst for renewed GBP weakness if expectations for negative rates are reinforced, we judge that the risk reward is no as compelling for holding short GBP positions at the current juncture.”