MUFG Research maintains a bearish bias on GBP, expressing that via holding a long EUR/GBP position targeting a move towards 0.9360.
"Last week, we published a long EUR/GBP trade view based on our belief that the fundamental backdrop for the UK was less favourable than in the eurozone. As ever we also cited the potential for Brexit risks to escalate at a given moment. It is difficult to pinpoint when those risks could suddenly start to escalate to a degree to undermine the pound but we look to be at a point when this issue is playing a role in GBP performance now,"MUFG notes.
"The current round of EU-UK negotiations will finish this week with no additional meetings scheduled. While the EU believe the real deadline for a deal is October they will offer hope that not all is lost but the risks of no deal are certainly escalating...Our sense is that markets remain convinced a deal will be done but that is set to be questioned more seriously over the coming weeks," MUFG adds.