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UK PM Johnson and EU Chief negotiator Barnier have been laying out their stalls ahead of the forthcoming UK/EU future relationship talks and the signals suggest that those talks could be testy. That’s why analysts at Rabobank see risks of GBP/USD trading below the 1.30 level on a 1 and 3-month view as the talks progress.

Key quotes

“The move lower was no doubt exacerbated by last week’s surge which followed the BoE’s January 30 decision to leave rates on hold. Month-end flows have probably also played a part in the volatility.”

“It is clear that for thousands of business across the UK and Europe, there is a lot riding on the outcome of the UK/EU future arrangement talks.”

Until more clarity emerges we expect GBP to be vulnerable.”