Jens Pedersen, Senior Analyst at Danske Bank, gives his views on GBP performance in light of the current Brexit negotiations.
“A rather volatile session for GBP yesterday. EUR/GBP initially dropped from 0.89 to 0.886 on higher-than-expected UK inflation data and then bounced back a couple of hours later following a Times report that Theresa May was said to have rejected Michel Barnier’s proposal for an ‘improved Irish border’. The informal EU Summit continues today and we expect EUR/GBP to remain volatile and sensitive to Brexit news”.
“We generally see risks skewed to the upside for EUR/GBP in coming weeks ahead of the annual conservative party congress, which starts on 30 September. Hence, corporate clients should take advantage of the recent decline in EUR/GBP and high implied volatility when hedging GBP income”.
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