Societe Generale Research discusses GBP outlook and flags a scope for Sterling to remain at the current extreme low levels for longer.
"Last week's CFTC FX positioning data show euro shorts rebuilding a bit, as the currency once again finds a low range to settle into. Shorts aren't big enough to really deter sellers yet,so more range-trading is in order. On the other hand, sterling shorts are back at their 2017 lows, as is GBP/USD. The CFTC data confirm the bearish bias but it's worth stressing that there is no good news on the horizon and the last time we were down here, both positions and currency remained at extremes for over 6 months," SocGen notes.
"We (still) think EUR/GBP is heading to 0.95 but not parity and that, along with the US opposition to further dollar weakness overall, supports a view that the GBP/USD view in this particular poll is too bearish. But we've got unemployment data in the UK tomorrow, CPI on Wednesday, and retail sales on Thursday, and not much good news to look forward to," SocGen adds.