Mitsubishi on sterling
MUFG Research discusses GBP outlook and flags a scope for some temporary support for the pound in the near-term.
"As a full two-week lockdown ("circuit-breaker") is avoided, the markets may show signs of relief given there has for some time been a strong assumption that full lockdowns like in March-May would be avoided," MUFG notes.
"Furthermore, the pound could well be supported by expectations that Rishi Sunak will soon follow PM Johnson's announcement with plans to extend support for workers on the job furlough scheme and for companies more generally.
We still see downside GBP risks but additional government support will provide some temporary support," MUFG adds.
