The British Pound Sterling was hovering near key levels on the charts, with traders reporting lower-than-average volumes going into the year-end.
The GBP is trading 0.3% weaker at 1.2454 against the U.S Dollar; 50-day moving average at 1.2416. While the Euro is up 0.1% to 0.8382against the Pound; 200-day moving average at 0.8314
The currency is now approaching the 50-day moving average against the dollar, a level below which it hasn’t closed this month.
Meanwhile, the euro was hovering near its 200-day moving average against sterling, a level that hasn’t been breached in a year.
The pound is “one of the most undervalued among the G-10” currencies and is set to rebound next year as political risk increases elsewhere, Nordea AG macro strategist Aurelija Augulyte wrote in a note.
The currency’s 16 percent drop against the dollar since the vote to leave the European Union could act as “a pull factor for many central banks and institutional long-term investors when rebalancing their portfolios,” she said, Bloomberg reports.
The Bank of England, which opted to keep policy on hold in its most recent meeting, will likely turn hawkish in 2017 as growth continues to surprise to the upside, Copenhagen-based Augulyte said.
