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In view of Jane Foley, head of FX strategy at Rabobank, despite a fresh majority government, there is unlikely to be any respite from politics for the GBP in 2020.

Key Quotes

“PM Johnson’s determination to use the threat of a no deal Brexit as a negotiating tactic will leave the pound open to bouts of selling pressure if the trade talks between the EU and the UK do not proceed well.”

“Although Johnson is of the view that a trade deal can be negotiated within a few months, Irish Taoiseach Varadkar has commented that it is possible that only the bones of a deal may be agreed by December. Political uncertainty is likely to act as a drag on growth and increase the risk of BoE rate cuts which should limit upside potential for the pound.”