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Jun 15 - 09:55 AM

GBP: 'When The Storm Hits'; Staying Short GBP/USD - Credit Agricole

By eFXdata  —  Jun 15 - 08:30 AM

Credit Agricole CIB Research discusses GBP outlook this week, and maintains a bearish bias expressing that via holding a short GBP/USD from 1.27 targeting a move towards 1.20.

"We believe that the GBP remains very vulnerable and we expect the headwinds for the currency to intensify from here. In that, we think that this week could become a focal point for GBP-bearish sentiment. On 18-19 June, the EU summit will have to deal with the question of the stalled Brexit trade negotiations. We expect little to no progress, however, and think that growing no trade deal Brexit fears could add to the headwinds for the GBP," CACIB notes. 

"Moreover, on 18 June, the BoE is expected to announce an extension of its QE programme and could discuss negative policy rates...Potential disappointments from the UK data this week (labour data, CPI and retail sales) could further add to the selling pressure on the currency. We remain short GBP/USD," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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