Sterling to rise this year on hopes for smooth Brexit
- LONDON (Reuters) – Britain’s pound will gain more than 3% against the dollar this year, supported by interest rate differentials and hopes for a smooth departure from the European Union, a Reuters poll found on Friday.
- Sterling (GBP) has gyrated wildly on any snippet of news about Brexit, largely ignoring economic data, and soared more than 2% after Prime Minister Boris Johnson won a resounding election victory in December, leading markets to believe an orderly exit from the EU was all but certain.
- It has since dropped back and was trading around $1.30 on Thursday as Johnson has signalled he plans to take a hard line in talks with the EU, raising fears about the prospect of a new cliff edge at the end of the year if no deal is reached.
- But the poll of nearly 60 foreign exchange strategists, taken this week, said the pound would be up at $1.32 at the end of this month – when Britain and the EU are due to part ways – and will have risen to $1.35 by the end of 2020.