The pound will trade near where it is now versus the dollar a year from now, according to median forecasts in the latest Reuters foreign exchange poll, but a lack of consensus on monetary policy has muddied the outlook.
Median forecasts from the poll of around 60 analysts, taken this week and ahead of an announcement by the Federal Reserve about its new asset purchase programme, saw cable at $1.60 in a month and nudging down to $1.58 in a year. But 12-month forecasts were wide, ranging from $1.35 to $1.90, wider than the October poll's 1-year forecast spread of 44 cents, suggesting that uncertainty is on the rise. The pound was trading around $1.60 on Wednesday.
Much will depend on the outlook for the dollar, which has been battered down on widespread expectations the US Federal Reserve will announce later on Wednesday another round of purchases of government securities.
The Fed is expected to buy between $80 billion to $100 billion worth of assets per month, or about $500 billion in the next six months under a new programme to bolster the struggling US economy. Sterling hit an 8-month high versus the dollar in the middle of October on expectations that was coming.