GBP/USD: Neutral as no deal Brexit risks increasingly discounted - CitiBank

In their weekly strategy report, analysts at Citibank, explained that recent weakness of the Stearling is pricing in Boris Johnson as the next Prime Minister and his desire to enact a hard Brexit. Political uncertainty remains the obvious downside risk according to them. They forecast GBP/USD at 1.24 over a period of 0-3M and at 1.35 in 6-12M. 

Key Quotes:

“We remain pessimistic saying that a new PM is unlikely to resolve UK Brexit gridlock. We also now believe that BoE rate cuts are possible, not just in a “No Deal” Brexit scenario but also if Brexit is delayed and the global economy weakens. But there’s a lot of bad news in the price. We are neutral to GBP as “No Deal” Brexit risks increasingly discounted.”

“GBP/USD’s key support remains at the pivotal 1.2449 level followed by the June 2017 lows at 1.2350, March 2017 lows at 1.1985 and December 2016 lows at 1.1841. A weekly close above 1.25 however would likely stabilize the unit ahead of announcement of new PM and the August 1 FOMC.”

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 assets. 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 Open Markets 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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD retreats after strong NFP, weak German data

EUR/USD is trading below   1.11 after US Non-Farm Payrolls beat expectations with 266K and mixed wage growth. Earlier, weak German data weighed on the euro. Updates on trade are awaited.


GBP/USD shrugs off strong NFP, focuses on UK elections

GBP/USD is trading below 1.3150 but off the post-NFP lows. The US gained more jobs than expected. The Conservatives remain in the lead ahead of the debate between PM Johnson and Labour leader Corbyn.


US recession? Not so fast, a calm look at the economy and currencies ahead of the NFP

Recent US economic indicators have been downbeat, but they include silver linings and are backed by robust consumption. Valeria Bednarik, Joseph Trevisani, and Yohay Elam...

Read more

Gold drops to fresh multi-day lows on upbeat NFP report

Gold faded an intraday bullish spike to the $1480 area and tumbled to fresh multi-day lows, around the $1465 region in reaction to upbeat US monthly jobs report.

Gold News

USD/JPY: bearish ahead of US employment figures

Japanese data missed the market’s expectations, triggering fresh concerns about the economy. Focus on US employment figures, market players anticipate dismal numbers. USD/JPY is technically bearish could break below the 108.00 level.