Price Forecast 2020: Pound may continue to fall on hard Brexit
The GBP/USD pair gained some positive traction during the early part of 2019 but then recorded some heavy losses over the subsequent six months and dropped to levels below the key 1.20 psychological mark in early September. The pair then rallied nearly 12%, hitting its highest level since May 2018 during the latter half of December in reaction to a landslide victory for the incumbent Conservative Party in the most important UK Parliamentary elections on December 12. The outcome is expected to break the longstanding gridlock and provide a clear path for ratification of the Withdrawal Agreement before the January 31, 2020 deadline.
Brexit uncertainty prevails on Cable forecast
The optimism proved to be beneficial for the sterling and lifted the pair to levels beyond the 1.3500 handle, albeit the momentum turned out to be rather short-lived amid renewed fears of a no-deal Brexit. The pair reversed its post-election relief rally after the UK Prime Minister Boris Johnson signaled hard Brexit deadline. Johnson’s is set to seek to pass legislation, which would require having a trade deal within months and make it illegal for the government to extend the Brexit transition period beyond the end of 2020. It is worth mentioning that the UK will leave the EU on January 31 but will remain in the single market and customs union until December 31, 2020. The current arrangement allows the Brexit transitions period to be extended by mutual agreement for up to two years up until the middle of next summer. Johnson's amendment will prevent such an extension, setting a tight deadline for complex talks.
Brexit uncertainty prevails on Cable forecast
The optimism proved to be beneficial for the sterling and lifted the pair to levels beyond the 1.3500 handle, albeit the momentum turned out to be rather short-lived amid renewed fears of a no-deal Brexit. The pair reversed its post-election relief rally after the UK Prime Minister Boris Johnson signaled hard Brexit deadline. Johnson’s is set to seek to pass legislation, which would require having a trade deal within months and make it illegal for the government to extend the Brexit transition period beyond the end of 2020. It is worth mentioning that the UK will leave the EU on January 31 but will remain in the single market and customs union until December 31, 2020. The current arrangement allows the Brexit transitions period to be extended by mutual agreement for up to two years up until the middle of next summer. Johnson's amendment will prevent such an extension, setting a tight deadline for complex talks.
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