Barclays trade of the week: Short GBP/JPY

Barclays on fading Brexit optimism

Barclays Capital FX Strategy Research discusses GBP outlook in the near-term, and thinks that investors should consider fading the current priced extreme optimism on the Brexit deal front.

"While a progression to trade talks is our base case, significant uncertainty remains regarding the Irish border issue, given reported (BBC) demands that Northern Ireland not receive "special status" from the Conservatives' coalition partner, the Democratic Unionist Party (DUP)," Barclays argues.

"In the context of extreme Brexit optimism and complacent FX markets, we recommend selling GBPJPY* this week," Barclays advises.

In line with this view, Barclays recommends being short GBP/JPY from 151.12 targeting 147.35 as its trade of this week. Spot is at 151.30.

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