How much is a Conservative victory priced in? Not that much, as it may extend its gains.
Here is their view, courtesy of eFXdata:
MUFG Research discusses GBP/USD outlook after the UK elections on Dec-12.
“We expect the polls to prove accurate and for Boris Johnson to win a majority and then for the UK to leave the EU on schedule on 31st January 2020,” MUFG notes.
“Following a Tory majority election victory in December, we would certainly expect GBP to break higher and into a 1.3000-1.3500 ranger versus USD. A brief move even higher is possible.
However, we see greater risks of GBP correcting lower in H2 2020 as no-deal risks at the end of 2020 possibly increase if the Tory government sticks to its promise and does not extend the transition period from the end of 2020,” MUFG adds.
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