Analysts at Bank of Tokyo Mitsubishi explained that the pound is likely to continue being driven by sentiment over ‘Hard’ versus ‘Soft’ Brexit over the short-term although given a clear conclusion on that won’t be obvious for some time we are sceptical of that over-simplification of the Brexit negotiations persisting.
"Withdrawing from the Single Market as a starting point does not necessarily mean a favourable trade deal will not be the final outcome."
"What developments this week may also have taught us is that the government is unlikely to be given a free hand in determining the balance between ‘Hard’ and ‘Soft’ Brexit and parliament may well act as a constraint on the government taking a ‘Hard’ Brexit approach, thus helping to limit negative pound sentiment from current levels."
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