GBP/USD: Some Negatives In The Price; Could Get A ‘Welcome Boost’ From EU Summit – Credit Agricole

The pound is under pressure, but has it fell too much? Perhaps Sterling has room to rise.

Here is their view, courtesy of eFXdata:

Credit Agricole CIB Research discusses GBP outlook around the EU Summit on June 28-29.

“While the lingering uncertainty likely added to market fears about a disorderly Brexit ahead of the summit, it may also suggest that some negatives are already in GBP price by now…

The bar for GBP-positive surprises from the EU summit may be rather low by now. In particular, recent discussions with clients suggested that most of them were bracing for a disappointment with the EU Heads of States concluding that no meaningful progress has been made in the Brexit negotiations.

This could mean that any indications that the UK and the EU have moved closer to a compromise may give GBP a welcome boost. Among the things to focus on would be evidence that the UK and the EU have moved closer to agreeing an extended transition period after Brexit,” CACIB argues.

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