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Sep 15 - 10:55 AM

GBP: BoE Meeting Could Be Overlooked This Week; Scope To Fade Some Of GBP Recent Weakness - TD

By eFXdata  —  Sep 15 - 09:30 AM

TD Research discusses its expectations this week's BoE policy meeting and sees a scope for fading some of GBP recent weakness. In line with this view, TD is short EUR/GBP as its ToTW targeting a move towards 0.91.

"The Bank of England will hold a meeting this week. But, with no new forecasts this week and no need to address the QE programme, we think that this meeting could be overlooked. That said, August MPC minutes did note some concern about growing downside risks in the wake of rising covid infections and the latest breakdown in Brexit negotiations. We think some of this might find its way into the tone of Thursday's statement," TD notes. 

"The recent collapse in cable and GBP crosses has been notable. We are not convinced that a floor has been established; our positioning tracker still shows that the market still holds longs in GBP. At same time, the reduction in longs has been fairly sizable. But with the next phase of Brexit negotiations not slated until September 28, we think there is some scope to fade some of GBP's recent weakness," TD adds. 

Source:
TD Bank Research/Market Commentary

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