Danske Research discusses GBP outlook and adopts a neutral bias on GBP/USD and bullish bias on EUR/GBP in the medium-term.

"Near term, we look for Sterling to move sideways at current levels. Although we expect a subdued economy to provide weakness in H2, this is not key to current EUR/GBP pricing. To take EUR/GBP notably lower, three things need to happen: (1) expansive fiscal policy must be enacted; (2) we need a rebound in soft and hard data and (3) the withdrawal agreement needs to be approved by Parliament. We remain sceptical as to the ease of reaching a UK-EU foreign trade agreement, but such concerns are unlikely to affect EUR/GBP until H2 next year," Danske adds.