Pound bulls to falter in near-term, Rabobank says

Sterling strength had further to run, Rabobank strategists said on Monday, but the loss of economic momentum in the British economy that was seen over the first quarter of the year and the prospect of tough Brexit talks, meant that the pound's path higher was not to be free of hurdles.

On the flip-side were expectations that a Brexit transition deal would finally be hammered out and for a May hike in Bank Rate.

Yet, "there are clear caveats to this optimistic outlook," said Rabobank's Jane's Foley.

"There are signs that the UK economy lost momentum in Q1, which could throw up hurdles for BoE hawks, also the Brexit trade talks could be tough. Consequently, we still see scope for GBP bulls to falter on a 1 to 3 mth view and see potential for EUR/GBP to trade high in this view."

On a 12-month view on the other hand, EUR/GBP was seen changing hands at 0.84.

Year-to-date, Sterling had been the best performing G10 currency, returning 5.55% against the US dollar and 2.58% versus the European single currency.

As of 1255 BST, it was apreciating by 0.53% against the Greenback to 1.4313 and was trading 0.23% stronger against the latter at 1.1571.