Barclays Capital FX Strategy Research via eFX
sees symmetric risks for GBP this week amid the the start of the fifth round of Brexit negotiations which will be focused on citizenship rights, financial settlement, and the Irish border.
On one hand, Barclays sees risks of a relief rally in GBP if "sufficient progress" is reached in Brexit negotiation this week, following last week's sell-off.
On the other hand, Barclays views the division within the Conservative party concerning the right way to approach Brexit as introducing continued downside risks to GBP.
"Michel Barnier's speech (likely on Thursday), will have particular resonance in light of the upcoming EU Summit (19 October). PM Theresa May's closing speech last week, delivered little new information around Brexit negotiations, while GBP weakened on speculation about the remaining length of her term in office," Barclays adds.
