Home GBP: Repricing The Brexit Risk N-Term; Going Long EUR/GBP Via Options – Danske
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GBP: Repricing The Brexit Risk N-Term; Going Long EUR/GBP Via Options – Danske

With the Brexit deadline just over a month away, what is the outlook for EUR/GBP?

Here is their view, courtesy of eFXdata:

Danske Research adopts a bearish GBP bias and prefers to express that via an options structure.

Near-term, we expect a repricing of the Brexit risk premium ahead of the 1 July deadline to send EUR/GBP higher again. We believe this will mirror similar events in late 2018 and summer 2019,” Danske notes.

We like to express our tactical bearish GBP view via options, which we believe allows for attractive risk-reward.  Specifically, we recommend entering a 2M EUR/GBP 1×2 ATMS call spread with strikes of 0.8910 and 0.9070, respectively,” Danske adds.

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Kenny Fisher

Kenny Fisher

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.