MUFG Research discusses GBP outlook and maintains a bearish bias in the near-term.
"The pound continues to trade on the back foot with cable falling and breaking the key support at the 1.2500-level. The break below open the door to a potential retest of the lows from late 2016/early 2017 at closer the 1.2000-level as we head into the crunch autumn period," MUFG notes.
"At the current juncture, it is difficult to see a potential trigger that could result in a sustained reversal of the current bearish trend of the pound. UK economic fundamentals have weakened sharply in recent months with growth likely to have contracted modestly in Q2. The BoE have signalled that they are likely to adopt a more dovish tone at their upcoming policy meeting in August," MUFG adds.