Aila Mihr, Analyst at Danske Bank, sees little prospect of a long-lasting rally in GBP from current levels, tough could remain supported by increased Brexit optimism in the short term.
"Overall, we still see the cross within the 0.8650-0.90 range in coming months, as it is still too early for negotiations to reprise Brexit risks significantly. Longer term, the case for a lower EUR/GBP in 2018 remains intact as Brexit uncertainty is clarified and we are short EUR/GBP via options (1Y put spread) as one of our FX Top Trades for 2018."
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