Greg Gibbs, analyst at Amplifying Global FX Capital, points out that the GBP sinks and rebounds on the decisive vote in the UK parliament against the Brexit deal negotiated by UK PM May and supported by her cabinet.
Key Quotes
“In our view, most probable scenarios for what comes next moves the UK towards a softer Brexit, where it agrees to accept EU rules to stay in the customs union, or ditches Brexit altogether.”
“The odds of a no deal (WTO) Brexit is now so low, in our view, it can be largely dismissed. As such, we see the downside for GBP to be greatly diminished and, if it occurs should be short-lived and relatively shallow; as it was today.”
“Conversely, we see the room for the GBP to rise as the risk of a no-deal (WTO) Brexit is priced-out, and the higher probability of a softer or ditched-Brexit is priced in.”
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