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Jul 30 - 02:36 PM
GBP/USD - COMMENT-Sterling Remains Offered As EU Says No-Deal To Renegotiation
First appeared on eFXplus on Jul 30 - 11:10 AM

GBP/USD fell to a 28-month low at 1.2120, just above the March 2017 trough of 1.2110 , and continues to lead the dollar index higher as other pairs remain in tight ranges ahead of Wednesday's expected 25bp Fed rate cut. Come what may with the Fed, the pound's prospects remain dim as PM Boris Johnson sticks to his "no ifs or buts" commitment to leave the EU on Oct.
31 while attempting to reopen the UK's withdrawal agreement nL8N24P61B, despite Brussels persistence in rejecting the possibility of renegotiation.
For the UK, the current currency weakness comes without much potential economic benefit since the Brexit uncertainty is sapping UK growth and inflation.
To sterling's further detriment, no-deal fears have reversed expectations for gradual UK rate hikes.
With PM Johnson's weak no-deal hand likely to be called by the EU, and BoE rate cut sentiment growing, sterling is likely to probe January 2017 lows sub-1.2000 as the long-running Brexit drama plays out .

GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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