GBP/USD heading back towards 1.20 - Natixis

Analysts at Natixis note that sterling was the currency that weakened most in the last week after the US dollar.

Key Quotes

“The British currency sagged despite the improvement in the December PMI, which rose to high levels by past standards, notably the composite PMI that came in at 56.7. The next macro publications should remain good, notably industrial production, which is expected to show an increase of 0.8% month-on-month. However, sterling will clearly remain jittery because of Brexit-related risks. The resignation of a key member of the government’s Brexit negotiating team rattled the market, which remains on hold waiting for the Supreme Court ruling regarding Parliament’s role in triggering Article 50. Under these conditions, we remain bearish on the GBP/USD, which we see testing 1.20 in the very near term, then 1.18 in coming months.”