UK: Sterling responds positively to expectations of reduced uncertainty - ANZ

Sterling is responding well to growing expectations that agreement may be reached on key topics ahead of the 14–15 December EU Summit, according to Brian Martin, Head of Global Economics at ANZ.

Key Quotes

“Many PPP measures suggest that sterling is anywhere between 10–20% undervalued vs USD, a level reached because of Brexit uncertainty.”

“A more settled political and economic backdrop would be positive for UK growth and could raise expectations of an earlier tightening from the BoE.”