The pound is facing pressure from different fronts, is likely to pull the GBP/USD down to 1.1800 over the next months.
“Having been overwhelmed by Covid-19 related news in March and April, Brexit headlines have returned to the fore in recent weeks. A bout of bickering between UK and EU negotiators has elevated the risk that no free trade deal will be hammered out between the two sides in time to avoid a no-deal Brexit at the start of next year.”
“If that wasn’t enough uncertainty for investors, political pressure has also been increasing on the government regarding its handling of the coronavirus crisis. “
“The combination of these factors leaves GBP very exposed and consequently we have revised down our GBP forecasts. We now target GBP/USD1.19 in 1 month and GBP/USD 1.18 on a 3 month view.”