MUFG Research maintains a bearish bias on GBP over the coming weeks.
"While the scale of collapse in confidence triggered by the ‘Growth Plan’ might not be repeated we would be cautious on there being a further improvement in confidence from here. We still see renewed GBP weakness ahead with a danger of a rush to retrieve investor credibility going too far and worsening notably the already grim economic outlook," MUFG notes.
"There is speculation now that Jeremy Hunt could over-compensate in filling the fiscal gap by demanding more aggressive government spending cuts and adding further tax increases when his updated plan is announced on 31st October," MUFG adds.
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