GBP: On Balance, Risk Remains Skewed To The Downside For The Pound N-Term – MUFG

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What is the outlook for GBP in the near-term?

Here is their view, courtesy of eFXdata:

MUFG Research maintains a bearish bias on GBP in the near-term.

“The pound remains under downward pressure although it has found some support at least temporarily in the near-term with cable holding above its 200-day moving average at 1.2735 and EUR/GBP failing to break above the 0.9300-level. The UK government continued to head down a more confrontational path with the EU yesterday when the Internal Market bill secured as expected a second reading,” MUFG notes.

On balance, we continue to believe that risks remain skewed to the downside for the pound in the near-term. There appears to be no easy quick way out to resolve the latest gridlock in UK-EU trade negotiations. A deal is only probable very late in the day now and hence any short-term pound bounce will not last with potential big declines still to come,” MUFG adds.

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.