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Market rates: GBP/EUR: 1.1042 | GBP/USD: 1.3532Bank transfer rates: 1.0833 | 1.3253Specialist transfer rates: 1.0965 | 1.3437More about bank-beating exchange rates, hereThe coming weekend could bring with it final news of whether the EU and UK have struck a deal on post-Brexit trade relations.

The outcome will likely have a material impact on the foreign exchange market on Monday, with Pound Sterling prone to a big 'gap' either higher or lower.

Despite the binary nature of the outcome, the majority of foreign exchange analysts we follow say the potential downside is substantially greater than the potential upside, primarily owing to a consensus belief that a deal will ultimately be secured.

"A deal outcome has been a wide-held and hence embedded expectation in markets for most of this year," says a note from investment bank BNP Paribas.

"If a deal is reached, hopefully this weekend, the pound could surge past the 1.35 handle, before potentially heading towards 1.40s," says Fawad Razaqzada, Market Analyst at ThinkMarkets.

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"As the markets have – since March – been led to believe that a deal was going to be reached eventually, the greater risk is if the UK departs without a deal. This outcome will probably come as a shock and could see sterling get a good pounding, sending the cable possibly down to $1.20," says Razaqzada.

BNP Paribas think the Pound-to-Dollar exchange rate (GBP-USD) can initially rise to 1.39 if a deal is secured. The Pound-to-Euro exchange rate (GBP-EUR) could rise to 1.1236.

For reference, at the time of writing GBP-USD is at 1.3521, GBP-EUR at 1.1033.

BNP say Pound Sterling strength is likely to be further boosted by the deployment of a Covid-19 vaccine and as global reflation hopes continue to build, especially as the currency

remains undervalued versus the USD.

According to the BNP Paribas modelling, fair value for the exchange rate would be at 1.37 by the end of 2021.

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What would happen to the Pound in the event of a 'no deal'?

"Despite the rising negative news flow in recent weeks, the GBP’s move lower has been relatively muted. We see scope for the GBP to weaken sharply in the event of a no-deal outcome," says BNP Paribas.

BNP Paribas' medium-term model suggests GBP-USD fair value under a 'no deal' of around 1.25 and GBP-EUR at 1.0204.

Rank Berich, Head of Market Analysis at Monex Europe, has on Friday done some financial modelling to try and ascertain where Sterling might end up once Brexit talks are concluded.

He finds that a 10% increase in 'no deal' odds on betting markets takes 2 cents off GBP-USD.

Assuming 'no deal' is priced at 20%, a deal takes GBP-USD to ~1.39.

"FX also tends to overshoot the fundamental significance of things so would not be surprised if we saw a "relief rally" much higher," says Berich.

Berich says he believes the odds of a 'no deal' is roughly 15% priced at the moment, and we will see a 1-4% rally on sterling on a deal.

Under a 'no deal' scenario GBP-USD can be expected to fall to ~1.20, or slightly below, which gives a ~10-12% fall.