Credit Agricole Research discusses GBP outlook in light of its yesterday's sharp squeeze higher in response to comments yesterday from EU Chief Brexit negotiator Michel Barnier.
"Nevertheless, the Brexit discussions in coming days and weeks will be scrutinised for any indications that the UK and the EU are moving closer to a softer Brexit deal encompassing a free trade deal for goods as well as an equivalence regime for the financial services.
We remain cautiously optimistic on the outcome of the Brexit negotiations and this underpins our moderately bullish longer-term view on GBP against both EUR and USD. That said, we would wait for more concrete indications of progress before changing out cautious near-term outlook for the currency." CACIB argues.