ANZ Research discusses GBP/USD outlook, and thinks that sterling is currently driving by conflicting forces which likely to keep it trading in a broad 1.35-1.45 range.
"Sterling’s medium to longer run prospects remain clouded by uncertainty surrounding the Brexit negotiations. But short term sentiment is more receptive to the political manoeuvrings of the opposition Labour Party (which now advocates a customs union with the EU), the slightly hawkish overtures from the BoE and a reasonable growth outlook
Whilst politics and the future relationship with the EU are major uncertainties, an EU transition period until end-2021 is expected to be agreed soon.
That would reduce immediate economic risks, whilst opposition support for a soft Brexit may temper the government’s approach to negotiations. We see GBP/USD trading in a 1.35–1.45, ANZ argues.