FXStreet notes that the UK press and the financial markets were readying themselves for an imminent post-Brexit trade deal between the UK and the EU at the end of last week. Following disappointing news over the weekend, by this morning expectations had re-grouped and the pound had adjusted lower. Jane Foley, Senior FX Strategist at Rabobank forecast EUR/GBP at 0.88/0.89 on a Brexit deal and at 0.93 on a no-deal outcome.

“A relief rally is likely this week if politicians manage to produce some kind of trade agreement. We see the potential for EUR/GBP to dip a little below 0.88 and for cable to take another run at the upside on this outcome.” 

“If a deal is struck, we see EUR/GBP trading in the 0.88/0.89 area in the months ahead. On a no-deal outcome, we expect to see a spike in EUR/GBP to the 0.93 area.”