GBP: Extreme downside risks reduced – Westpac

Tim Riddell, senior market strategist at Westpac, suggests that in the UK, parliamentary opposition to a “no-deal” Brexit has reduced extreme downside risks for GBP

Key Quotes

“There are still a variety of potential permutations, but Parliamentary opposition to a “no-deal” Brexit has reduced that risk and also reduces extreme downside risks for GBP. Nevertheless, data are now showing the impact of uncertainty on activity. Inflation is now more benign and BoE policy should be stable until there is some form of Brexit clarity.”

“GBP is likely to be capped in the low 1.30’s with bias for a further slide into the 1.25-1.27 area until potential new plans can be fleshed out.”