Credit Agricole on sterling
Credit Agricole CIB FX Strategy Research discusses GBP outlook in light of the recent media reports which have suggested that the EU and the British officials have agreed on the settlement of the so called 'divorce bill'.
"GBP rallied in response to the media reports and we suspect that the currency could remain supported for now. Indeed, if confirmed, the agreement would represent a potentially very important step towards trade negotiations between the UK and the EU. In turn, this may help alleviate the worst of the Brexit unease of investors and businesses alike ahead of the announcement of the British Brexit offer next week...
We note that long-term FX valuation seem to argue for more GBP sustained gains against the antipodeans, CHF and USD. At the same time GBP is starting to look expensive vs EUR and JPY," CACIB argues.
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