The British pound will remain steady against the euro over the next year, perhaps more resilient but still tied to the euro zone's fortunes, according to a Reuters poll of foreign exchange analysts who mostly stuck to their views from one month ago.
The survey of around 60 strategists and economists predicted sterling would hold near 83 pence per euro in each of the one-, three-, six- and 12-month forecast windows, unchanged from the findings of last month's poll. The pound traded at 83.6 pence per euro on Wednesday, above its February lows near 85 pence after some fairly positive economic sentiment data raised hope the euro zone might avoid recession, or suffer only a very mild one. Thursday's deadline for a Greek sovereign debt restructuring may prove key to the euro/sterling outlook.
Athens needs to strike a deal with private investors that is crucial to accessing a new 130 billion euro ($170 billion) bailout package, needed to avoid a chaotic default.
"We may well see a near-term rebound to 84.0-84.2 for euro/sterling given its sharp decline," said Ian Stannard, head of European forex strategy at Morgan Stanley. "But once the Greek bond swap is out of the way the focus will be back on euro zone economic fundamentals which will keep euro/sterling under pressure."
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