MUFG Research discusses GBP/USD outlook and sees a scope for bounce from current levels in the near-term.
"We can’t recall a period when the sentiment and news flow has been so consistently negative and our sense here is that a lot of bad news is now in the price. Retail sales data so far this quarter clearly point to the high probability of a rebound in Q2 real GDP growth....
But as we have been stating for some time, the pound is unlikely to respond to positive macro developments until there is clarity on Brexit. Here is where pessimism has clearly increased of late, adding increasing downside pressure on the pound. But July will at least bring the possibility of some increased clarity..
With pessimism so high currently, the pound could easily get a lift from the prospect of the UK government providing details on its negotiation stance and how it plans to resolve the Irish border issue," MUFG argues.