Arne Lohmann Rasmussen, chief analyst at Danske Bank, notes that the EUR/GBP cross moved to the lower end of the 0.85-0.87 range after PM Theresa May’s statement yesterday evening.

“For now, we expect EUR/GBP to stay above 0.85, but if the negotiations are successful and May and Corbyn can find common ground, we could soon see a move below 0.85. However, this is easier said than done. When a deal is agreed upon, we expect EUR/GBP to move down to 0.83. In case of no deal Brexit, we expect a move towards parity. A long extension would also be slightly GBP-positive and we could see EUR/GBP trade in the 0.84-0.86 range.”