Pound’s Outlook Dims According to Pollsters

According to the latest polls, the ongoing rally for the Pound Sterling is likely drawing to a close as mounting worries over the Brexit negotiations weigh more heavily. Since June 2016, when Britain voted to withdraw from the European Union, the Pound has lost nearly 10.5% of its value on a trade weighted basis. Also from the poll conducted earlier this week, 60 economists are forecasting that the GBP/USD pair will likely be stuck at around the $1.39-$1.40 level over the course of the next year. One Credit Agricole analyst predicted that the combination of deteriorating fundamentals and rising uncertainty related to the Brexit will keep the Pound well contained.

As reported at 10:00 am (JST) in Tokyo, the GBP/USD was trading at $1.3889, a gain of 0.13% and just off the session peak of $1.39; the pair earlier hit a low of $1.3868. The EUR/GBP is trading at 0.8833 Pence, down 0.02%; the pair has ranged from a session trough of 0.88314 Pence to a peak of 0.88412 Pence.

Disorderly Brexit Still a Worry

Earlier this week, Michel Barnier, the chief negotiator for the European Union, told UK officials that they need to decide the type of relationship they wanted with the EU after negotiations were complete. The problem stems from dissent within the ruling Conservative party; the Prime Minister, Theresa May, is often at odds with other members of her cabinet. A disorderly Brexit is the thing that analysts have most feared as it would negatively impact both the Pound Sterling and the UK economy.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.