The pound made its way up but still hesitates ahead of yet another significant hurdle in the Brexit saga. What’s next?
Here is their view, courtesy of eFXdata:
Credit Agricole CIB Research discusses GBP outlook and adopts a cautious bias ahead of the release of the UK’s government’s position on Brexit in a white paper on 9 July.
“Ahead of the release, the FX investors will pay particular attention to any indications of the government’s ideas on topics like the Irish border issue, the length of the transition period as well as the shape of the future trading relationship with the EU. Given how low investor expectations are regarding Brexit at present, there may be some possibility for GBP positive surprises as details of the document are ‘leaked’ in the coming days.
In addition, the prospect for a ‘dove’ to replace Ian McCafferty at the MPC when he leaves in September has added to the headwinds for GBP of late.
While we stick with our constructive medium-term view on GBP, we remain cautious on the currency in the very near term,” CACIB argues.
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