If a Brexit trade deal is reached, what is the outlook for GBP?
Here is their view, courtesy of eFXdata:
CIBC Research expects shallow GBP rallies after a potential Brexit trade deal.
“As the clock ticks down, the question remains: Is there sufficient time left to conclude a deal? We still expect a deal to be reached, but we will need to see a degree of statecraft (political concessions) in order to clear the remaining negotiating redlines,” CIBC notes.
“Our central case scenario remains a deal being brokered before month end, notably ahead of the final scheduled EU Parliament session of the year, from December 14-17. However, a deal is not the end of the process. Rapid ratification, within necessary protocols, risks becoming a concern.
Post-Brexit headwinds, as the ease of doing business is undermined by costly and time-consuming customs checks, allied to the perpetuation of low productivity and weak business investment, suggests that any post-deal GBP rallies will prove short-lived,” CIBC adds.
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