GBP/USD: weakness looking stretched? - Scotiabank

Analysts at Scotiabank explained that Sterling remains soft as investor price “hard Brexit” risks back into the pound.

Key Quotes:

"Investor price “hard Brexit” risks back into the pound following PM May’s remarks at the weekend suggesting that border security and control over legislation was paramount over access to the EU single market. Sterling has lost 2.5% since Friday’s high and we think the near-term prospects for the pound – broadly – remain soft."

"From a longer-term point of view, we do think, however, that the pound’s weakness is starting to look stretched but a rebound for the GBP may not occur until investors have a better sense of the Brexit timetable and the government’s plans for the aftermath. UK equities – at a new record – seem to like GBP weakness."