Credit Agricole CIB Research discusses the GBP outlook around the recent Brexit developments.
"A look at the latest price action in GBP crosses would suggest that we continue to make steady progress towards a Brexit deal. Indeed, EUR/GBP trades close to recent lows, whereas GBP/USD has hit multi-month highs, arguably supported by the recent USD downtrend across the board. The latest Brexit developments should diminish the risk of a no-trade-deal in our view," CACIB notes.
"That said, they further lengthen the period of uncertainty for the FX markets and thus could discourage any further GBP rally for now. Looking ahead, FX investors could go back to follow the latest Brexit developments more closely given the relatively empty data calendar this week (apart from the UK’s final PMI prints for November). The GBP could even start retracing some of its recent gains in the absence of clear evidence that progress towards a Brexit trade deal has been made," CACIB adds.