GBP a top performer of late, but why? - Scotiabank

Analysts at Scotiabank explained that sterling was out-performing on little or any obvious justification for the relative strength (no data, no Brexit news beyond last week’s rapid passage of the Brexit bill through the Commons).

Key Quotes:

"An Economist article suggesting the EU may present the UK with a “divorce bill” of EUR64bn to account for unfunded pensions, commitments to EU projects etc. has attracted some attention and may dampen the market’s enthusiasm for the pound."

"While we do think the GBP is starting to look “cheap” from a longer-term point of view, we also think the exchange rate remains subject to weakness as the Brexit trigger nears.

We would prefer to look for opportunities to buy GBP dips on some of the more “stretched” crosses."