GBP: Modest Appreciation Expected On EU Trade Deal But Looking For A Move Into 1.40 In 2021 - ANZ

GBP: Modest Appreciation Expected On EU Trade Deal But Looking For A Move Into 1.40 In 2021 – ANZ

What is the forecast for GBP/USD for Q1 and for the end of 2021?

Here is their view, courtesy of eFXdata:

ANZ Research discusses GBP outlook into 2021 and targeting GBP/USD at 1.36 by end of Q1 ahead of 1.40 by end of 2021.

“Optimism is skewed towards the UK and EU reaching a trade deal, but the familiar hurdles around fisheries and level-playing-field arrangements persist. Sterling may experience a relief rally if an agreement is reached, but we anticipate the GBP’s upside is now more constrained than it would be under a comprehensive economic accord. Much of GBP’s projected rise vs USD next year is down to USD weakness,” ANZ notes.

“Although welcome, a narrow trade deal will inevitably result in heightened trade friction, which will weigh on growth as the economy adjusts. We look for GBP/USD to move towards 1.40 but remain below its post ERM average of 1.58,” ANZ adds.

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Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer. Kenny's Google Profile

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