According to Rabobank analysts, pound traders should focus on the impact of the Autumn Statement and the political skills of the UK PM, Rishi Sunak, for the next few days. They continue to see EURGBP move towards 0.89.
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“Some commentators have attributed the GBP’s modest recovery yesterday afternoon against the EUR to reports that the EU was optimistic about the possibility of reaching a compromise on the protocol. However, during the Brexit process the GBP did not tend to overreact to daily news related to Northern Ireland Over the coming weeks we expect sterling investors to focus on the impact of the 17th November Autumn statement on Prime Minister Sunak’s ability to to hold the Conservative party together, on the UK’s growth/recession outlook and on Bank of England interest rates”.
“We would expect protocol related issues to only have a clear impact on GBP as the relevant time frames approach. We are still not convinced to change our bearish view on sterling and we maintain a 3 month view of 0.89 EUR/GBP “.
Source: Fx Street
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