According to analysts of Bank of America Merrill Lynch (BofAML), the future dynamics of sterling will depend on which way the Brexit pendulum will swing.
"If the United Kingdom leaves the European Union without concluding an agreement, then the British currency may fall in price to $1.10 against the dollar," representatives of the financial institute predicted.
According to them, this event will be a shock not only for the pound but also for the European economy since its growth is already slowing down.
The economy of the currency bloc may suffer more than markets expect, "in the case of the implementation of the" hard "scenario. This may cause a recession in countries such as Italy, Spain and Greece, "noted by BofAML specialists.
"If investors again begin to doubt the stability of the eurozone, then they are likely to consider the UK as a safe haven, and its decision to leave the EU in a more positive way," they added.
However, experts say that "If Brexit is accompanied by an agreement for the transition period, the GBP/USD pair could rise to the level of 1.50".
The material has been provided by InstaForex Company -
www.instaforex.com