MUFG Research discusses GBP outlook and maintains a cautious bias in the near-term.
"The pound has underperformed modestly overnight with EUR/GBP rising to a high of 0.9060. Pound weakness has been driven in part by a warning from the EU’s financial services chief that the City of London may have to wait beyond the end of this year to know whether it will secure prized access rights to the whole of the EU’s market according to an FT report. It would leave banks and asset managers grappling with a complex patchwork of national rules," MUFG notes.
"...A country-by-country approach for investment firms is seen as more cumbersome, even if temporary, than pan-EU rights. The developments add additional uncertainty as the Brexit transition period is due to end this year," MUFG adds.