Nomura Research discusses GBP outlook and turns neutral in the near-term.
"This is likely to prove a tough week for trading GBP . In the short term, the market looks to be pricing in a potential Brexit deal, and GBP is over 1% higher on it. But there is a lot to think about beyond that," Nomura notes.
"We can’t help but see a Brexit deal as a “buy the rumour, sell the fact” moment. We could very well witness in the weeks ahead the euphoria of the market avoiding a no-deal scenario and GBP higher with it, but in short order see hopes met with the reality of adjusting to a new trading relationship, along with all the other medium- to long-term negative factors we list below," Nomura adds.