GBP/USD seen lower between 1.17-1.20 ahead of Oct 31st Brexit deadline – Reuters poll

According to the economists polled by Reuters, the British pound is not out of the woods yet, as the UK PM Johnson’s leadership poses increased risks of a no-deal Brexit.

Key Findings:

“Before that divorce date arrives, the pound will fall further and trade between $1.17 and $1.20, a Reuters poll of foreign exchange strategists predicted.

The median forecast for a disorderly Brexit - whereby no deal is agreed - jumped in an Aug. 2-7 Reuters poll of economists to 35%, up from 30% given in July and the highest since Reuters began asking this question two years ago.

Forecasts in this poll ranged from as low as 15% to a high of 75%.

With a deal expected, median forecasts in the wider poll of over 50 forex market watchers gave a healthier outlook for sterling and it was expected to have rallied to $1.27 in six months and then be trading 10% higher at $1.33 in a year.

Against the euro, which may struggle as the European Central Bank is expected to ease policy in September, the pound will also gain ground. On Wednesday, one euro was worth about 92.1 pence but in a year, the poll said it would drop to 87.1p.”