Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Pound May Depreciate to $1.55 by Quarter’s End, Schneider Says

Don't Miss Out —
Follow us on:

Jan. 25 (Bloomberg) -- The pound may weaken against the dollar because of the British currency’s “very toxic mix of fundamentals,” Schneider Foreign Exchange said.

Sterling will drop to $1.55 by the end of the first quarter and reach $1.40 by the end of June, Stephen Gallo, head of market analysis at Schneider in London, said by phone.

The “boxed-in” Bank of England will struggle to contain medium-term inflation pressures and weaker-than-expected growth, he said. The U.K. will have “very low or negative real interest rates, so not a lot of yield support for sterling,” he said.

Risks to Schneider’s forecast include a strong first-quarter performance from the U.K. economy, which could support the currency, Gallo said. The pound tumbled today after data showed Britain’s fourth-quarter gross domestic product unexpectedly contracted.

The pound was 1 percent weaker against the dollar at $1.5822 as of 4:03 p.m. in London. Earlier it depreciated 1.5 percent, the most since May last year. Against the euro it was 1.3 percent lower at 86.40 pence.

To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net;

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.