Analysts at CIBC, point out that the Euro and the Pound positioning changed, leaving the EUR/GBP pair with a bigger potential to the downside rather than the upside.
“Investors are increasingly betting against sterling, given the perceived increased risk of a hard Brexit under the presumed leadership of Boris Johnson. At the same time, short positions against the euro have being pared, leading GBPEUR lower (EUR/GBP higheR).”
“While uncertainty could continue to weigh on sterling further in the near-term, with so much negative sentiment already seemingly priced in, there would appear to be greater room for an upward move on any good Brexit news rather than further downside on bad news.”
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