Sterling to decline this year on Brexit woes

The sterling, which was on track for its five-month peak on Wednesday, is expected to lose footing this year as Brexit uncertainty and coronavirus-related concerns intensified. A subdued year for the currency is foreseen before recuperating in 2021, a Reuters survey showed.

July had seen the pound recording its largest monthly increase in more than a decade. The jump was mainly from a weaker dollar after the United States monitored an upsurge in new virus cases and as the upcoming presidential poll brought unease.

The pound was quoted $1.31 on Wednesday. However, it is likely to decline to $1.29 in a month and to $1.28 in three months before returning to current levels in a year’s time, according to a poll of 60 foreign exchange strategists.

“The dip is because it seems like the uncertainty over Brexit will continue until we get to around September or October, so until we know what is going on it can’t trade as well,” said Jordan Rochester of Nomura Holdings.