Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Sterling to gain on hopes for UK-EU trade deal by year-end - Reuters poll

share with twitter share with LinkedIn share with facebook
02/05/2020 | 09:37am EDT
British five pound banknotes are seen in this picture illustration

Sterling will be nearly 4% stronger in a year than it is now, according to a Reuters poll of market strategists, based on expectations that Britain will secure a trade deal with the European Union this year despite its tough initial stance.

On Monday sterling took a pummelling after Prime Minister Boris Johnson set tough terms for the trade talks. Some of the forecasts in the Reuters poll were gathered before Johnson's speech.

Britain left the EU on Friday and Johnson's comments on Monday have rekindled fears of a cliff-edge - whereby no trade deal is agreed - at the end of an 11-month transition period which Johnson has repeatedly said he won't ask to extend.

Foreign exchange strategists in Reuters polls have repeatedly said that leaving without a deal, and so trading on World Trade Organisation rules only, would be rough for the economy and the worst outcome for the pound.

The currency ended January on a high note after the Bank of England surprised many by leaving borrowing costs on hold but fell as much as 1.7% to $1.2984 on Monday. It was trading around $1.30 on Tuesday after better-than-expected construction data.

Median forecasts in the Jan. 31-Feb. 4 poll of 65 strategists showed the pound would be up at $1.31 in a month, $1.32 in six months and then $1.35 in a year's time.

That is still well below the $1.50 it was trading at before the June 2016 referendum, when Britons voted by 52% to 48% to leave the world's largest trading bloc.

With time short to agree even a bare-bones deal, economists in a Reuters poll last month said there was a median 20% chance of a disorderly departure at the end of the transition period, during which existing agreements apply as if Britain were still an EU member.

BREXIT BOUNCE?

Johnson's emphatic December election victory stoked hopes for a Brexit bounce to the economy and the BoE said on Jan. 30 a recent pick-up in growth had weakened the case for it to lend more monetary support.

"A bounce in UK economic growth helped by a good-sized fiscal stimulus in Q2 remains our base case," said James McCormick, global head of desk strategy at NatWest Markets.

"We still like buying sterling and the BOE's decision to pass on a cut last week (which was a surprise to us) has given the sterling trend some renewed momentum."

In contrast to the BoE, the U.S. Federal Reserve and European Central Bank eased policy last year.

But the coronavirus outbreak spreading further beyond China's borders has raised more global growth risks and is set to keep the U.S. dollar, which has dominated most others in foreign exchange markets for around two years, firmly on its throne well into 2020.

With the outlook for euro zone growth already lukewarm before the virus outbreak and no more policy changes expected from the ECB, little movement is expected between the pound and the common currency. [ECILT/EU]

Trading around 84.9 pence on Tuesday, in one-, six- and 12-months time one euro will be worth 85.0p, the poll found.

(Polling by Manjul Paul and Sujith Pai; Editing by Gareth Jones)

By Jonathan Cable

Stocks mentioned in the article
ChangeLast1st jan.
BASE CO., LTD. 5.46% 4345 End-of-day quote.60.73%
BASE, INC. -12.38% 5660 End-of-day quote.222.51%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) -0.48% 1.80034 Delayed Quote.-3.89%
BRITISH POUND / CANADIAN DOLLAR (GBP/CAD) 0.08% 1.70852 Delayed Quote.-0.32%
BRITISH POUND / NEW ZEALAND DOLLAR (GBP/NZD) 0.14% 1.92315 Delayed Quote.-2.62%
BRITISH POUND / SWISS FRANC (GBP/CHF) -0.26% 1.18 Delayed Quote.-7.49%
BRITISH POUND / US DOLLAR (GBP/USD) -0.02% 1.255 Delayed Quote.-4.78%
EURO / BRITISH POUND (EUR/GBP) 0.44% 0.90744 Delayed Quote.5.93%
EURO / US DOLLAR (EUR/USD) 0.48% 1.13902 Delayed Quote.0.86%
THE GLOBAL LTD. -0.47% 211 End-of-day quote.-55.20%
WORLD CO., LTD. -0.54% 1463 End-of-day quote.-45.63%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
04:16pNEWS HIGHLIGHTS : Top Financial Services News of the Day
DJ
04:11pGOODRICH PETROLEUM : Announces Conference Call to Discuss Second Quarter 2020 Financial Results
PU
04:09pChilean president offers middle classes cash to head off pensions withdrawal
RE
04:06pU.S. CDC head says mask-wearing for 4-8 weeks could get COVID-19 under control
RE
04:02pMassachusetts sues Uber, Lyft over driver status as contractors
RE
04:01pPRESS RELEASE | JULY 14, 2020 Updates to 2020 Census Response Rate Challenge Toolkit A new 2020 Census Response Rate Challenge Mini Guide geared toward helping local officials and leaders motivate their communities to respond to the 2020 Census.
PU
03:53pIowa farm billionaire's companies receive U.S. pandemic aid
RE
03:50pBritish Columbia province forecasts C$12.5 billion operating deficit in 2020/21
RE
03:46pLast-Chance Webinar Offers Ethanol Infrastructure Grant Help
PU
03:46pAustria and its eastern neighbours have cooperated successfully in combatting the epidemic
PU
Latest news "Economy & Forex"