Sterling likely to be shaky in December before gaining in 2021: Reuters poll

Sterling likely faces a rough December as Britain’s transition period ends on Dec. 31 and still has yet to agree on a trade deal with the European Union, a Reuters poll said.

The British pound has been shaky since the country decided to leave the European Union bloc in 2016, with the currency going up and down since then, but diplomats reported on Thursday they were looking into closing a trade deal with the U.K. by Friday or over the weekend.

Presently trading over $1.34, medians in the Nov. 30-Dec. 3 poll said it would trade between $1.31 and $1.36 this month. Over the euro, the British pound will trade between 88 to 91 pence.

Derivative markets fell on Thursday as investors weighed doubts of a trade deal agreement between Britain and the EU, dragging market optimism of Britain being the first country to approve the Pfizer-BioNTech COVID-19 vaccine.

However, successive Reuters polls said the two parties would reach an agreement before the year ends. More so, 50 foreign exchange strategists suggested the pound would climb to $1.39 in a year’s time, stronger than the $1.35 forecast given last month.

The poll concluded that against the common currency, the pound will be at 89p in a year.