Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger
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Having sunk to 13-month lows, sterling could fall by up to another 10 percent in the coming months should Britain crash out of the European Union without a deal on future trade ties, luring more speculators to bet against the currency. Sterling lost almost 2 percent last week just as British holidaymakers were heading off for some overseas sun. The latest move lower was kickstarted by Trade Minister Liam Fox's warning that, with Britain less than eight months from its scheduled EU departure date in March, there was a 60 percent chance of leaving without a deal.If that comes to pass, Britain's currency would crash to $1.20 – from today's $1.2750 levels, the Reuters poll showed, a fall of around 6 percent. But sterling is forecast to rise to $1.34 by end-January if an agreement is reached.That would leave the pound close to parity with the single currency, below post-Brexit referendum lows of 94 pence and current levels of 89.2 pence.Nine-month implied volatility, which covers the official March 29, 2019 Brexit date, has spiked even further, to 17-month highs.
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