Goldman Sachs note that "there have been...>

STERLING: Goldman Sachs note that "there have been three market narratives over

the last couple of weeks that have weighed on Sterling. First, progress on EU-UK

negotiations ahead of the July 1 deadline to extend the transition period has

been minimal. The two sides have traded public barbs and the UK's proposed text

seems more ambitious than the government's characterization and what EU

negotiators have been prepared to accept. Second, the market has been exploring

the potential for negative policy rates in the UK, and recent BoE comments have

been slightly more nuanced than before, with policymakers leaving the option on

the table for the future. Third, while the UK instituted later and less

stringent lockdowns than many of its neighbors, it is now also lagging behind

much of Europe in the reopening process. Taken together, we see a risk of

additional Sterling-negative headlines in the weeks ahead. However, we do not

see any of these issues as likely sources of major GBP depreciation. Our

approach over last couple of years has been to recommend fading EUR/GBP moves

above 0.90, and that seems a reasonable approach today too; we recommend

covering any GBP shorts."