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Economists at Standard Chartered think the market is too downbeat on the potential for a Brexit deal and forecast GBP/USD at 1.40 by year-end and EUR/USD at 1.16. 

Key quotes

“We think the market is too downbeat on the potential for a ‘good’ outcome: a deal or extension of the transition period.”

“We forecast GBP/USD at 1.40 at year-end based on a good outcome (and EUR/USD 1.16).” 

“In a ‘bad’ outcome – no deal – we could see both GBP and EUR trade to 1.10 versus the USD (and hence EUR/GBP to parity).”