GBP to remain under pressure in short-term to medium-term on uncertainty in UK

The outlook of GBP continues to be extremely uncertain unless it is evident how things would unfold in the UK. The sterling faces a risk of further depreciation, especially against the US dollar as it is in demand as a safe haven in connection with the uncertainty resulting from UK’s vote to leave the European Union.

Hence, the GBP is expected to perform a bit better against the euro. However, in the short-term to medium-term, the sterling is expected to remain under pressure because of the overall uncertainty, noted Commerzbank in a research report.

“Long term we expect Sterling to recover as in effect not much will change if the expected far reaching association agreement between Great Britain and EU-27 will be reached,” added Commerzbank.