The future of the British Pound seems to be poor, analysts have pointed out on Monday, as the GBP/EUR exchange rate was at 1.1230. The UK currency may face more turbulent times in the coming months adding more pressure to it, hindering its recovery. One of the key factors pressuring the sterling is Brexit, which will continue weighing on the UK economic performance. 

“The outlook for the currency is unlikely to improve much in the coming quarters, which is why we have turned slightly more pessimistic on Sterling,” analysts said. “The market has apparently quickly come to the realisation that, even with an orderly Brexit, the economic outlook for the UK remains bleak.”

However, the Sterling still had a good start to the year and is now up by 0.63%. Against the USD, the Pound’s exchange rate is 1.3570.

On the other hand, the Pound-to-Australian Dollar exchange rate rose to 1.7660 at the start of the week, Australia’s strong exposure to the Chinese economy helped the currency become the second-best performing of the world's major currencies in 2020. As the Chinese economy grows stronger, the Australian Dollar keeps on gaining against the U.S. Dollar, Euro and Pound.

Analysts predict that the EUR/USD exchange rate will drop to 1.20  due to European Central Bank (ECB) currency concerns as well as a setback on vaccinations. At the time of writing, the EUR/USD rate is at 1.2078.