The firm says the outcome of Brexit has become more difficult to predict
In a note to clients on Friday, the firm cut its one-year forecast (June 2020) for GBP/USD to 1.29 from 1.35-1.36 beforehand. Meanwhile, they are also pushing up their one-year forecast for EUR/GBP to 0.91 from 0.86 previously.
They did outline several scenarios for where the pound may end up depending on what sort of Brexit outcome materialises:
a) 1.33 if UK exits under the terms of the current withdrawal agreement
b) 1.20 if Tories return with a hard Brexit leader
c) 1.31 if Labour party delivers a softer Brexit
d) 1.20 if second referendum votes leave again
e) 1.40 if second referendum votes to stay in the EU
f) 1.25 if there is continued political paralysis and lengthy extension of Article 50
Despite the forecasts, the firm recommends that GBP short positions against the franc and the yen to be more favourable.