Bank of America Merrill Lynch FX Strategy Research notes that positioning in the major G10 FX currencies is very light, reflecting the lack of conviction in the market as many offsetting forces point to a mixed outlook.
In particular, BofAML argues that GBP is almost impossible to trade, regardless of ones’ view on the final Brexit outcome.
"GBP is currently subject to random headlines on UK politics and the Brexit negotiations. The BoE is about to hike in response to tight labour markets and high inflation, but the economy is slowing. It is also hard to have a strong view on the final Brexit outcome, as a trade deal will likely need more years of negotiations than the UK government seems to expect," BofAML adds.
Source: Bank of America Merrill Lynch Rates and Currencies ResearchOriginal Article
