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The pound is looking for a new direction as Brexit uncertainty looms. Where will it go next?

Here is their view, courtesy of eFXdata:

MUFG Research discusses GBP outlook in light of the latest Brexit vote developments.

“The pound has recovered most of its losses from yesterday after the Speaker of the House of Commons, John Bercow, torpedoed PM May’s plans for submitting her deal for a third vote to parliament as early as today. Speaker Bercow said in particular that PM May could not put her Brexit deal to another vote, short of major revisions,” MUFG notes.

“After the initial knee-jerk reaction to this news sent cable down below 1.32,  the market appears to settle on the view that even if the vote does not go ahead today, the next logical step would simply be for PM May to request an extension to Article 50.

If this market view holds, it should be positive for the pound and likely take it back higher in the 1.33-1.35 range against the dollar. Under these circumstances, the longer the extension the more positive it would initially be for the pound,” MUFG adds.

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