John Hardy, head of forex strategy at Saxo Bank, told CNBC via email that so far market reaction to Brexit has been random.

“I think a lot of this is randomness – the “softer Brexit” idea is just a narrative from the U.K. – an interesting one, but hard to hang our hats on as things are in flux. Just as important is the EU perspective, and there, we have to consider the strong Macron victory and a couple of themes from that,” he said.

“Second, actual EU moves are isolating the U.K. – like today’s measures aiming to have euro-denominated derivatives cleared only by EU-based banks – therefore requiring massive reshoring away from London,” he added.

The EU has also recently boosted an inner debate on its future without the EU and has put forward plans to create a European defense union – something that the U.K. opposed in the past.

Despite the muted market reaction, Hardy noted that it’s surprising how sterling is “actually hanging in there as well as it has.”

Sterling was higher at about lunchtime on Tuesday at $1.2736, up by 0.6 percent on the day, after initially sinking in the aftermath of the General Election.

Jane Foley, head of forex at Rabobank, said that the idea of a softer Brexit has been preventing sterling from falling further on the back of the news of a hung parliament.

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