21.12.201800:38 Forex Analysis & Reviews: Brexit

The withdrawal of the United Kingdom from the EU should be officially held on March 29, 2019. Meanwhile, the situation around Brexit is still far from resolved. According to experts, depending on how the authorities cope with the "divorce" process, in the foreseeable future, the British currency rate can either jump to $1.59, or sink to $1.10.

In the opinion of JPMorgan currency strategists, with the implementation of the "soft" Brexit scenario, the pound can strengthen by about 5% against the dollar and the euro, and in the event of an exit without a deal - become cheaper by at least 10%.

"If the British Parliament approves the draft of the divorce contract with the EU, then in 2019 the pound could rise in price to $1.45, and in the absence of a deal, it could approach parity paired with the euro and reach $ 1.10," HSBC believes.

BNP Paribas experts expect that the GBP/USD pair will rise to 1.36 in the event of a second referendum, or drop to $1.15 if the UK leaves the EU without an agreement.

Nomura analysts, in turn, believe that the pound will complete 2019 at $1.59.

"Our optimistic outlook for the British currency is explained by a bearish attitude towards the dollar. It is assumed that the United Kingdom will avoid indiscriminate Brexit, agreeing a deal before the deadline, or go to the second referendum, "they said.

"In our opinion, among the currencies of G10, the dollar will continue to remain relatively strong, and the pound - to be weak, primarily due to the state of the British economy," said representatives of Barclays.

Meanwhile, according to analysts at Bank of America Merrill Lynch, the British currency is undervalued by 15-20%.

"At current levels, the pound looks relatively cheap, which opens up good opportunities for long-term investors to buy it," they said.