The UK government decided to give MPs an option to extend Brexit. What’s next for the pound?
Here is their view, courtesy of eFXdata:
Societe Generale Research discusses GBP/USD scenarios in light of the latest Brexit developments.
“Theresa May headed off to the EU-Arabian league open pool competition and apparently played so well she came back with a concession to Conservative remainders that they can take a ‘no deal’ exit from the EU off the table if the PMs propose deal can’t get the support of Parliament on March 12. This is, of course, a ploy to drag Hard Brexiteers towards her position, but sterling’s gained all the same,†SocGen notes.
“We still think the best guess of GBP/USD for this time next year if the UK avoids a no-deal exit is around USD/GBP 1.40, whereas a no-deal exit itself takes it to 1.20 (and temporarily lower). A second referendum would see GBP/USD get to 1.50 but that’s still very, very unlikely. So it’s hard to argue with the market move, which looks significant on charts,†SocGen adds.
For lots more FX trades from major banks, sign up to eFXplus
By signing up for eFXplus via the link above, you are directly supporting Forex Crunch.
