Forex - Cable to Remain Range Bound Amid Brexit Uncertainty, Analysts Warn
Forex - Cable to Remain Range Bound Amid Brexit Uncertainty, Analysts Warn -
The pound was roughly unchanged against the dollar on Tuesday, but hopes that cable will turn in a strong performance in the coming months are unlikely as Brexit-related uncertainty will keep a lid on upside amid signs of little progress on U.K-European Union trade talks.
Ireland’s Foreign Minister Simon Coveney reportedly flagged concerns that the U.K. and EU are likely headed for a collision on Brexit talks unless significant progress is made on negotiations.
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GBP/USD rose 0.05% to $1.2447.
Worries are mounting that Britain could leave the EU without a trade deal as the U.K. has insisted it would not seek to extend negotiations beyond the transition period, which ends on Dec. 31.
The U.K. and EU have until the end of June to agree to extend trade talks beyond the end of the year.
Without a trade deal, many expect Britain is set for economic hardship as the country would likely have to adopt less-friendly trade terms, set by the World Trade Organization.
The uncertainty around the progress of Brexit talks "threatens to weigh on investment and on GBP in the coming months," Rabobank warned.
The stuttering start to the week comes days ahead of the Bank of England policy meeting on Thursday, though the meeting is unlikely to have a meaningful impact, Bank of America (NYSE:BAC) said, estimating that GBP/USD will trade at the lower end of the recent $1.22-to-$1.26 range this month.