FINANCE expert Viraj Patel predicted the sterling will soar by the second quarter of the year if there is a breakthrough on the Brexit transition period deal.
ING Investment research analyst Viraj Patel claimed UK markets should expect a “deferred sterling upside” by the second quarter of 2018.
Speaking to Bloomberg, the financial expert said the pound’s resilience to Brexit uncertainties shows this could mean the pound is poised for an increase.
He said: “The pound’s resilience over the past couple of weeks, even yesterday to the Brexit noise, suggests that we’re in a different Brexit trading environment to what we were in 2017.
“One, UK markets are re-coupling back to data, the Bank of England has sent the Hawkish signal.
“All of that suggests deferred sterling upside until we get the one thing that markets crave which is clarity on the Brexit transition deal.
“Once you get that, if you’re optimistic on that, expect deferred upside. “We’re looking for .45 around the first or second quarter.”
Brexit negotiations on the terms of the transitional period are set to resume next month.
Prime Minister Theresa May said a two-year transitional period would allow businesses to adjust to changes arising from Brexit and enable the UK to further negotiate its future relationship with the bloc.
But EU Chief negotiator Michel Barnier said that an agreement on the transition period is “not a given” since “substantial” disagreements remain on the issues of freedom of movement and customs procedures on the Irish border.
The pound US dollar exchange rate is currently at around .140, up 0.25 per cent with a jump of over a cent on Wednesday.
Pound exchange rate update: Finance expert says sterling will rocket when THIS happens