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George Ma
in
Forex
May 24 09:37

Bank of America: GBP will remain weak

Britain will not extend the transition period, which will have a negative effect.
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Bank of America expects GBP to remain under pressure ahead of the June deadline to extend Brexit's transition period, especially against the euro, Swiss franc and Japanese yen. The transition period ends at the end of 2020. It is intended to produce a new trade agreement between the parties to replace the EU rules, which are still in force. If there is no trade deal, WTO rules will take effect from next year.
Analysts note that GBP also faced a sharp narrowing of the yield spreads between the UK and other G10 countries, as Bank of England is open to the possible introduction of negative interest rates in the country.
EUR/GBP was trading on Friday at 0.8957.