Citi maintains a bullish bias on GBP on the prospects of a trade deal.
GBP has been a laggard in the Asia session, with an article in The Times making the rounds stating that despite the UK and EU remaining engaged in negotiations, Europe’s leaders will demand today that the European Commission publish no-deal plans amid no-deal fears," Citi notes.
"Bigger picture though, the calls for no-deal plans are likely just noise. Both sides remain in negotiations and CitiFX Strategy’s base case is still for a deal (80% probability).
Our London trader also yesterday noted that clients continue to highlight their desire to buy UK assets in general, and GBP as a result. "Real money in particular are just waiting for the green-light to increase their allocation in Sterling via GBPUSD and EURGBP," Citi adds.