GBP unlikely to gain more ground against the USD or EUR – Westpac

According to analysts at Westpac, GBP seems unlikely to gain much more ground against either the US dollar or Euro as Brexit's reality sets in.

Key Quotes

“The polls suggest PM Johnson will be returned with a workable majority and thus that the withdrawal agreement bill (WAB) will be passed as he intends. This outcome is likely to see an election honeymoon for GBP/USD to USD1.33 in early–2020. However, the WAB only starts the Brexit process, with all of the detail of trade post separation still to be agreed. This will be an arduous and likely contentious process which, to our mind, will push Sterling lower again, to around USD1.31 from end–2020.”

“To this profile, risks are skewed downward. For the UK, lingering uncertainty will hold back growth in business investment, while the labour market can likely to only improve marginally from its historically–strong state.”