FX Bank Trade Ideas MS - We like to buy.......>

FOREX: FX Bank Trade Ideas

MS - We like to buy GBP/USD at market with a target of $1.37 and stop of

$1.2930.

The UK seems to be edging closer towards a Brexit deal as the EU seems prepared

to make some concessions. One important consideration will be whether the UK

will be allowed to decide itself when to pull away from what initially could be

a 'Norway' style of relationship with the EU. Today's speech by EU's Barnier may

provide more clarity. While the Brexit debate may dominate price action, the

hawkish content of last week's BoE inflation report and the expansionary budget

could work as catalysts for additional GBP strength once markets are clearer on

the potential Brexit outcome. GBP risk premium is likely to fall. The key risk

to this trade is that Brexit negotiations become more uncertain, keeping GBP

offered.