MUFG Research flags a scope for a temporary GBP strength this week.
"We see some way to go yet to reaching an EU-UK trade deal but as long talks continue the markets are likely to assume the best and that should provide GBP support this week," MUFG notes.
"August GDP should also help but the economic outlook remains a downside risk significant headwinds on the horizon limiting GBP upside.. The Q2 GDP plunge was revised slightly higher (-20.4% to -19.8%) last week and the BoE now estimates the economy is only 3-4% below pre-COVID levels. August GDP will be helped by the “Eat Out to Help Out” boost for restaurants but there are worrying signs for September and Q4 with high frequency data pointing to lockdowns impacting mobility and therefore activity. Those concerns will limit any positive GBP reaction to a strong Aug GDP print," MUFG adds.