Where Will GBP Head After Article 50 is Triggered?

Sterling is likely to drop around 5 percent against the dollar soon after Britain starts its formal divorce proceedings from the European Union next year, but it is not expected to weaken to parity with the euro, a Reuters poll found.

Since Britons voted on June 23 to leave the EU, the pound GBP= has dropped almost 20 percent against the dollar, a decline that is not yet over, according to the poll of over 60 foreign exchange strategists taken in the past few days.

Prime Minister Theresa May has said she intends to trigger Article 50, which starts the two-year countdown to leaving the EU, before the end of March, and the median forecast suggested after she does the pound would fall to $1.15.

Reuters

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.