28.05.2020 Eur/Gbp Daily Analysis

28.05.2020 Eur/Gbp Daily Analysis

Eur/Gbp 0.8967, it is trading lower with 0.0012, the pound is getting stronger against the euro but however British pound is pressured by uncertainty over Brexit trade negotiations and the possibility of introducing negative interest rates on severe damage to the economy, caused by coronavirus lockdown. The “The UK has said that if there is no breakthrough this summer, it will begin planning for ‘no deal’ as a base case. Crucially, despite the COVID-19 outbreak and no breakthrough, we do not believe the UK will ask for an extension of the transition period.  The lack of progress will mean investors start to reprice a higher probability of no deal, leading to a weaker GBP.” “There have been increasing discussions within the BoE about cutting the Bank Rate down to negative territory but given the size of the financial industry and signs the UK economy is recovering, we do not expect the BoE to cut to negative, although the option remains available