Francesco Pesole, FX Strategist at ING, notes that sterling remains in wait-and-see mode as yet another unofficial deadline for the EU-UK trade deal is breached. Given that time for a deal is running out, both parties are expected to rush into a deal as early as this week, which could have material implications for the pound, he adds.

"Sterling is staying in wait-and-see mode as yet another unofficial deadline (yesterday) for a EU-UK trade deal has been breached."

"Our UK economist keeps noting that the prospects of a deal are looking slightly brighter, but also that (a) the core set of issues remains largely unresolved; (b) time for a deal is running out and while we see officials suggesting more than one week may still be needed, the technical time for ratification in the EU and UK is dangerously shrinking."

"In light of this, we could see both parts rushing into a deal already this week, which could have material implications for the pound, and UK data including (CPI, retail sales, PMIs) will likely play second fiddle this week."