FXStreet reports that according to economists at TD Securities, GBP/USD still looks capped around current levels.

“The UK and EU have confirmed they have reached a deal on the goods trade, so as of January 1st, the UK is outside of the EU customs union and single market and will begin to negotiate new bilateral trade agreements with other nations. While this does now provide for zero-tariff trade, firms will need to adjust to the specific rules of origin requirements to take advantage of that.”

“We do not see this as any game-changer for markets. A deal was in the price and the specifics are unlikely to have any bearing on the direction of markets from here. While GBP is very cheap across many of our valuation models and much of the negotiation-linked uncertainty can fade, there is still significant economic underperformance and disruptions to follow early in 2021.”

“We start the year looking to sell GBP on rallies, especially on the non-USD crosses.”