GBP: Impact of Brexit is likely to see uncertainty return - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that the blow out in UK’s budget deficits may have been sweetened by the infrastructure investment announced in the Autumn Statement, but the vulnerability of forecasts to the impacts of Brexit is likely to see uncertainty return.

Key Quotes                           

“The Supreme Court hearing is due to start on 5th December.”

“A slew of business, consumer and PMI surveys and lending data are likely to show confidence given the stability of markets into the Autumn Statement and GBP’s performance post US elections. However, the position adjustment may be running its course and leave GBP vulnerable to any sways in Brexit sentiment.”

“1.26-1.28 area remains a key resistance area and should cap GBP/USD. Similarly, the 0.83-0.85 area in EUR/GBP should limit GBP gains. GBP/USD may have formed a base in the low 1.20s, but this area is likely to be retested as Brexit concerns resurface.”