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Strategistst racing to downgrade forecasts for Sterling

Monday, Jan 18 2016
There were no data releases from the UK today, with Sterling still being rather weak. Strategists are racing to downgrade their forecasts for a currency that is being knocked by a litany of woes from the prospect of record-low interest rates being entrenched for longer and a possible exit from the EU that business leaders say will damage Britain. Analysts’ forecasts for the sterling-dollar exchange rate by June have dropped 2% in the past month, even as they failed to keep up with its almost 5% slide in that period.
 
The UK currency “doesn’t have many friends at all”, said Jane Foley, a foreign-exchange strategist at Rabobank, whose $1.44 mid-year forecast has already been surpassed. “It’s easy to stack up the negative sterling reasons,” said Ms. Foley. “We’ve had disappointing economic data, inflation is very weak, the market is pushing back expectations about interest-rate hikes, and there will be political issues this year.”
 
Sterling is currently being traded around 1.4270 handle. Pair is likely to find support around 1.42 handle and resistance above 1.43 level. There will be no major data releases in the rest of the session.
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