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Sep 18 - 09:55 AM

GBP: Risks Still To The Downside As S/T Valuation Model Shows Brexit Risk Premium Still Small - MUFG

By eFXdata  —  Sep 18 - 08:30 AM

MUFG Research maintains a bearish bias on GBP over the coming weeks.

"Our short-term valuation model in the past has shown large divergences from spot at times of high levels of Brexit uncertainty. The degree of divergence currently is quite modest indicating to us that the level of Brexit risk premium priced remains small," MUFG notes. 

"Hence, we still see considerable risks to the downside especially now with Brexit risks also now more clearly linked to a likely move to negative rates by the BoE," MUFG adds. 

Source:
MUFG Research/Market Commentary

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