GBP offers little appeal - Westpac

GBP offers little appeal even after its recent multi day correction back to 1.3000 amid ongoing background negatives including; 1) persistent Brexit vulnerabilities; and 2) a central bank that is clearly in no rush to begin normalising monetary policy judging by its recent projection downgrades, according to Richard Franulovich, Research Analyst at Westpac.

Key Quotes

“Spec positioning remains short GBP based on CFTC data but at -30k it is the least negative exposure since the Brexit vote, a strong sign markets may have overdone it with brushing away Brexit risk.”

“EUR/GBP looks set to continue its steady ascent past 0.9000 while GBP appears destined for multi day trade below 1.3000 until genuine BoE rate hike risk appears on the 3 month radar.”