LONDON: SterlingNSE -0.90 % would weaken considerably against both the dollar and euro if Britain left the European Union without a deal, according to strategists in a Reuters poll, with many saying the pound could reach parity with the common currency.
The pound had its biggest monthly loss against the euro in two years in May and also lost against the dollar, whacked by risk aversion amid the Brexit impasse.
It is still unclear how, when or even if Britain will leave the EU almost three years since Britons voted in a referendum to part ways. The two sides are currently due to divorce on Oct. 31, later than the original March 29 deadline.
Currently hovering around $1.27, median forecasts said cable would trade between $1.15-$1.20 within a month following a no-deal Brexit. Two said it could go as low as parity to the dollar.
On Wednesday one euro was worth about 88.6 pence, but the median trading range was 91-96p in a no-deal scenario. Almost half of respondents said the euro could strengthen to one pound or beyond.
"The risk of a no-deal Brexit is rather limited in reality but it would be catastrophic if it actually happens," said Everett Brown at IDEAglobal.
ORDERLY BREXIT?
Boris Johnson, a former London mayor who was the face of the official 2016 campaign to leave the EU, is favourite to replace Theresa May as British prime minister. May announced last month she would quit the top job over her failure to deliver Brexit.
Johnson, who served as foreign minist ..
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