GBP remains under pressure on Brexit – Danske Bank

Analyst Mathias Mogensen at Danske Bank assessed the prospects for the British Pound.

Key Quotes

“The main driver for GBP this week is likely to be Brexit , as negotiations have entered a critical phase with the new deadline on 4 December for the UK to make additional efforts to resolve differences”.

“While progress in the Brexit negotiations is a GBP positive, we do not see a case for a significant rally in the GBP short term if an agreement is reached with the EU to discuss the future relationship (second phase), as it is still too early to price out Brexit risk premiums, in our view”.

“We still see EUR/GBP within the 0.8650-0.90 range near term with risks becoming more balanced as improved prospects of progress in Brexit negotiations weigh against EUR/GBP supportive factors such as relative rates, growth, and the domestic political uncertainty in the UK”.