Morgan Stanley feedback on GBP through eFX.
- “We stay impartial on GBP however proceed to see draw back dangers. The current upside shock in inflation, with UK CPI rising to a 40-year excessive of 10.1% in July, led to a pointy repricing within the front-end of the UK charges curve however didn’t translate into GBP energy. We predict such value motion is telling of the change within the response perform of GBP to fee differentials and market expectations of coverage tightening, as extra coverage tightening accelerates the expansion slowdown, resulting in GBP weak point,” MS notes.
- “We proceed to see the weak development outlook weighing on GBP. Nevertheless, we don’t see a fabric leg decrease in GBP from right here given how low development expectations already are and the way bearish sentiment is already on GBP. Quick-term positioning stays brief GBP, notably towards the EUR,” MS provides.
We get a brand new UK Prime Minister quickly (can be introduced on September 5) and thus scope for an entire new bunch of **** ups.
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