In a note to clients today, Bank of America Merrill Lynch takes stock of the recent developments in GBP and look ahead to the prospects for the pound.
"The current market environment, with a distinct lack of focus on UK data, suggests that GBP will be beholden to global financial market developments as the pound has effectively decoupled from broader UK data trends.
Nonetheless, news flow around cross-border M&A deals involving the UK has picked-up and could provide GBP with some flow support, BofA argues.
"Near-term GBP outlook remains beholden to broader market trends and we believe UK data is taking a back seat for now
Strong upward momentum in GBP following UK election has corrected whilst positioning is effectively neutral.
EUR/GBP looks attractive for medium term shorts based on policy divergence theme. Express this via options rather spot
