Danske Research discusses EUR/GBP outlook and prefers to fade the move lower.
"Today we expect FX markets to be driven by trade news and Brexit deadlines. On the latter EUR/GBP went down by nearly 2 percent yesterday on news that Ireland PM Leo Varadkar might support a Brexit compromise, after talks with Boris Johnson. The move comes after weeks of increased pessimism on possible progress. Further, the UK monthly GDP tracker came out decently, alleviating the need to add near-term pressure on Sterling by moving forward pricing of a possible cut by Bank of England," Danske notes.
"Details on what such a compromise would entail remains sparse, as does the reality of such a compromise in getting through parliament. For now, we prefer to fade the move in Sterling as yet another sentiment-driven shift but without being rooted in a check of political reality," Danske adds.