GBP/USD to drop 5% on a no-deal Brexit – Bloomberg survey

Dhwani Mehta FXStreet

The pound could fall as much as 5% against the US dollar if the UK and European Union (EU) fail to reach a Brexit trade deal, the latest Bloomberg survey of nine strategists revealed on Tuesday.

Key findings

“The currency may fall to $1.25 by the middle of next year, as the disruption exacerbates economic damage from the pandemic. “

“A deal is still the base case scenario, with respondents seeing a 70% chance of some form of agreement. If it comes to pass, the currency could rise another 2.5% to $1.35, a level not seen since the end of 2019.”

“A Bloomberg options pricing model suggests about a 25% chance of a sharp shift above $1.40 or below $1.26 in a year’s time.”

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