Sterling is likely to gain, and by the time Britain leaves the European
Union next March it is expected to have recouped much of the losses
since the June 2016 decision to leave the bloc, according to a Reuters
poll.
However, the pound is unlikely to re-test the levels above $1.43 it
traded at earlier this year, when the Bank of England was expected to
raise interest rates in May. Instead, it left rates unchanged.
The currency is down around 10 percent since Britons voted to leave the EU, trading at $1.34 on Wednesday, but a lot of those losses will be wiped out on expectations for rate hikes and a good divorce deal with the EU.
In a month’s time, sterling will be at $1.33, in six months at $1.35 and in a year it will have jumped to $1.41, the June 1-6 poll of over 50 foreign exchange strategists predicted.
Better-than-expected business surveys this month have stoked expectations the Bank will raise interest rates by 25 basis points to 0.75 percent in August, as was predicted in a May 23 poll [GB/PMIS][ECILT/GB] .
Britain’s economy almost flat-lined at the start of the year, at least in part due to heavy snow, and the Bank will be want to see evidence that downturn was only temporary before it raises borrowing costs.
BoE rate-setter Silvana Tenreyro said on Monday much of the weakness in Britain’s economy would probably prove temporary, but the timing of when rates would next go up remained an open question,
Uncertainty about the relationship Britain can agree with the EU after Brexit continues to cloud the currency’s outlook. Forecasts for the 12-month outlook ranged from $1.23 to $1.54.
The currency is down around 10 percent since Britons voted to leave the EU, trading at $1.34 on Wednesday, but a lot of those losses will be wiped out on expectations for rate hikes and a good divorce deal with the EU.
In a month’s time, sterling will be at $1.33, in six months at $1.35 and in a year it will have jumped to $1.41, the June 1-6 poll of over 50 foreign exchange strategists predicted.
Better-than-expected business surveys this month have stoked expectations the Bank will raise interest rates by 25 basis points to 0.75 percent in August, as was predicted in a May 23 poll [GB/PMIS][ECILT/GB] .
Britain’s economy almost flat-lined at the start of the year, at least in part due to heavy snow, and the Bank will be want to see evidence that downturn was only temporary before it raises borrowing costs.
BoE rate-setter Silvana Tenreyro said on Monday much of the weakness in Britain’s economy would probably prove temporary, but the timing of when rates would next go up remained an open question,
Uncertainty about the relationship Britain can agree with the EU after Brexit continues to cloud the currency’s outlook. Forecasts for the 12-month outlook ranged from $1.23 to $1.54.
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