Goldman Sachs argues that the case for structural GBP weakness has diminished this year but stays short of turning outright GBP bull.
"We highlighted that the case for idiosyncratic Sterling weakness has diminished this year. For one, the drop in natural gas prices has led to a much more upbeat growth outlook, which was reflected in the February PMIs. Second, while in our view the Windsor deal is not a game changer in itself (it mostly affects trade between Northern Ireland and the rest of the UK), it highlights that the political winds are (for now) blowing towards an “ever-closer Union”, and that is likely to be the course into the next election," GS notes.
"However, we still would by no means be turning into structural Sterling bull," GS adds.