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Sep 30 - 02:55 PM

USD: Pullback Mainly On GBP Rebound And Unlikely To Be Sustained; Sell GBP/USD - MUFG

By eFXdata  —  Sep 30 - 01:00 PM

MUFG Research maintains a bullish bias on the USD, expressing that via adding a new short GBP/USD exposure in its ToTW portfolio targeting a move towards  1,0450.

"We are not convinced that the pullback lower for the USD over the last couple of trading sessions will be sustained despite it having reached more extreme levels of overvaluation at the start of this week. The sharp rebound in cable has played a key role in the USD’s correction lower but recent GBP gains are built on shaky foundations," MUFG notes. 

"We are not convinced that investor confidence in the UK’s public finances has been fully restored even after BoE action to protect financial stability in the UK. Higher levels for cable above 1.1000 make it more attractive to re-establish short GBP positions,' MUFG adds.

Source:
MUFG Research/Market Commentary

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