GBP/USD: Bringing Brexit back – TDS

Economists at TD Securities note that GBP's prospects are worsening by the day. 

Key quotes

“Despite the crisis going on all around us, UK leaders are determined to push the issue of Brexit this year. We cannot dismiss that their stance will likely be deliberately hardened given the circumstances, in an effort to deliver a hard Brexit and begin with a clean slate.”

“Michel Barnier's comments today suggest that the EU and UK are drifting further apart in discussion points. Indeed, he noted that the UK argued for positions that they were too far apart on. If it continues like this, the USD's status as the haven of choice just got stronger as cable's days with a 1.20-handle are numbered.”

“1.25 looks like it will be formidable resistance. But for this quarter, we think the prospects of reaching our 1.18 forecast has improved in recent days.”