GBP: There Are Three Bs That Matter For GBP At Present – Credit Agricole

Credit Agricole CIB FX Strategy Research argues that there are three Bs that matter for GBP at present – Brexit, Boris and the BoE.

"Brexit risks have reared their ugly head once again after Moody’s has recently lowered its UK credit rating citing uncertainty about the outcome of the negotiations with the EU.

That uncertainty has seemingly grown further after the foreign secretary Boris Johnson has stressed the importance of the so-called Brexit ‘red lines’, concerning the length of the transitional period, the UK contribution to the EU budget and the role of the ECJ after Brexit.

Last but not least, weaker data of late has diminished the GBP-positive impact from growing rate hike expectations ahead of the November BoE meeting," CACIB adds.

Trade-wise, CACIB believes that current GBP levels may offer an attractive opportunity to consider new longs.

Source: Credit Agricole CIB ResearchOriginal Article