GBP: Merrill Lynch discusses pound, advises medium-term shorting of EUR/GBP

In a recent note sent to clients, Merrill Lynch shares its outlook for the GBP:

"The current market environment, marked by an obvious lack of interest in UK data suggests that the evolution of the GBP will depend on the global financial markets, since the pound has in fact uncorrelated itself from UK data trends.

Nevertheless, information about international mergers and acquisitions involving the UK are on the rise, and could provide support to the GBP.

In this context, EUR/GBP seems to be an attractive pair for medium-term short positions, based on the theme of monetary policy divergence between the BoE and the ECB."