MUFG Research discusses GBP outlook and sees a scope for further decline in the near-term.
"The BoE has quickly delivered aggressive easing which has further eroded support for the GBP. The key policy rate has hit a new low of 0.10% alongside restarting QE of up to GBP200 billion of asset purchases. The BoE has likely fired its opening salvo now which included the creation of both the Term Funding Scheme with additional incentives for SMEs (TFSME) and Covid Corporate Financing Facility (CCFF)...The measures are welcome and will help dampen the risk of an even deeper and more prolonged recession in the UK," MUFG notes.
"We are not convinced though that the GBP has bottomed yet despite falling to 35 year lows against the USD," MUFG adds.