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Morgan Stanley entered a short GBP/JPY........>

FOREX
FOREX: Morgan Stanley entered a short GBP/JPY position at the NY close on
Thursday with a stop at Y148.30, with a target target of Y140.00.
- Morgan Stanley "pivot our USD/JPY short to a GBP/JPY short given our
expectation for USD strength. GBP, given its positive correlation to risk and
oil prices, is likely to be under pressure in an environment of escalating
protectionism and the underperformance of risk asset prices. Its large current
account deficit renders it vulnerable to declines in global liquidity. Political
uncertainty in the UK as it relates to Brexit and domestic political matters may
keep GBP under selling pressure as well. With an August BoE hike mostly priced
in, we see limited GBP upside risk from a hike later this summer. The key risk
to the trade is that the BoE turns noticeably more hawkish in its rhetoric,
leading to GBP strength."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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