GBP/USD has been drifting lower as the clock continues ticking toward Brexit. Where next?
Here is their view, courtesy of eFXdata:
MUFG Research discusses GBP outlook in light of the collapse of Thomas Cook and the latest Brexit developments.
“How the UK government deals with the repatriation of 150,000 UK citizens on Thomas Cook vacations following the collapse of the travel company will add to what could prove a challenging week for PM Johnson. The government has promised to return all citizens and pay for accommodation through to their scheduled departures but the government is being criticised for not providing a GBP 200mn bailout,” MUFG notes.
“PM Johnson is now heading to New York for the United Nations General Assembly in the hope of making some progress in Brexit negotiations. We are sceptical of much in the way of progress being made and on top of that there is also the risk of PM Johnson having to cut his trip short to return to London if the Supreme Court decision goes against the government and PM Johnson is deemed to have misled the Queen over proroguing parliament.
Expectations of a breakthrough in New York are low however, and hence we wouldn’t expect any notable GBP selling on a failure to even make progress. Leveraged short GBP positions are already somewhat elevated,” MUFG adds.
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