JP Morgan analyst, Malcolm Barr, remarks in a research note to clients
The firm says that it would be a surprise if there was enough progress made to bring about an agreement by the end of October, though chances of a no-deal Brexit materialising is about one third in their view:
"The chance of a no-deal is about a third, but with brinksmanship part of the process it may appear higher than that before an agreement is reached."
In other words, negotiators from both sides are expected to leave it to the last minute - as per what we have been accustomed to with all things Brexit over the years.
We're now entering the supposed "hot phase" of negotiations but both sides are still unlikely to produce much room for a compromise, so that may be a key risk factor to consider for the pound over the next few weeks.
Adding to that will be the UK government's furlough program expiring in October. Put together, that may see downside risks for the pound start to build in the coming months.
