UK 10-year yields closed at their lowest level so far this year and confirmed a small reversal pattern. Relative outperformance of UK bonds is helping to keep GBP under pressure. GBP/USD broke to new lows for the year and we look for further downside toward the November range lows. The consolidation phase in EUR/GBP is ultimately a bullish feature, which is expected to lead to further upside, while profit taking in short JPY positions is keeping the focus lower for GBP/JPY.
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Barclays Capital