The bank says sterling is not cheap and that GBP can go much lower

DB have raised the probability for a 'no-deal' Brexit to 45%.





The bank acknowledges that on long term valuation models (citing PPP and FEER models) GBP is close to fair value, but say political risk is skedded asymmetrically downwards. Short GBP/JPY "remains an excellent expression " (adding that yen is ranking far cheaper across our suite of trade-based models )



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Weekly chart below:













