Sterling seems to be taking little notice of potentially improved trading and political relations between the UK and the EU. Economists at ING analyze the outlook of the GBP against the EUR and USD.

ECB looks like it has much further to hike than the BoE

“An improvement in UK-EU relations probably does little for Sterling in that it will not improve the broader trading environment between the UK and the EU. Instead, the macro-monetary settings of the two will continue to dominate. The ECB looks like it has much further to hike than the Bank of England and suggests that EUR/GBP continues to find support under 0.88.”

“GBP/USD will be vulnerable to continued Dollar strength and risks a move to 1.1850 this week.”