GBP exposed to downside risks in the near-term - BAML

FX Strategy Research Team at Bank of America Merrill Lynch (BAML) is out with its latest view on the sterling, in the wake of hawkish BOE and Brexit talks underway.

Key Quotes:

“GBP has been unable to maintain its initial gains after last week's hawkish BoE outcome.”

"In ordinary circumstances, GBP may have reacted in a more sustained, positive, manner (in similar fashion to CAD and CAD rates following the recent guidance shift by the Bank of Canada) to such a shift in MPC voting patterns.”

“But these are not ordinary times and we are not surprised to see GBP paring back some of its initial gains against the backdrop of so much political uncertainty domestically."

“As a result, BofAML sees further near-term GBP downside and keeps recommending playing that via long EUR/GBP exposure.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.