Danske Research sees a limited scope for further GBP recovery over the coming weeks.

"EUR/GBP moved notably lower during yesterday's session as a deal on the Northern Ireland Protocol (NIP) was announced by UK PM Rishi Sunak and European Commission President Ursula von der Leyen. The NIP tackles the post-Brexit issue of implementing an EU-border between the Republic of Ireland and Northern Ireland, which would violate the peace agreement from 1998, all the while still keeping the British inner market intact," Danske notes. 

"We assess the further market impact to be limited on UK assets and hence GBP with the outlook of the tail risk of a EU-UK trade war to be eliminated," Danske adds.