It seems like the weakening of the British pound against major currencies in the early European session on Wednesday is just the beginning. A growing number of prominent analysts and investors predict that the pound will weaken further in the months to come, with the currency possibly even dropping 15 percent by the end of next year, according to Bloomberg Business.
Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp., believes that if current trends are to continue, the pound will probably fall to the high -$1.30 to low -$1.40 by the end of next year.
"I've had more people ask me about sterling in the last four or five weeks than I've had in six months. People are starting to think about these things in 2016, and how it impacts sterling," Derrick said.
Just as the pound is being battered by other currencies in Europe, the sterling has so far remained quite steady in other markets. For example, despite the pound falling to a record low in the European market, it remained quite stable in the Asian session on Wednesday, reported RTT News.
Nevertheless, the drop in the pound signifies a red flag for Europe's financial institutions. Deutsche Bank AG, for one, sees the sterling sliding to a level that has been unseen since 1985. Morgan Stanley has also predicted a slump of about six percent to $1.40 by the end of 2016.
Check out more business news here.
