LONDON: The outlook for sterling has gained next to nothing from a crushing of expectations in the last month that the Bank of England will announce more money printing next week, a Reuters poll showed.
Most analysts do not think sterling is a safe haven from the economic storm threatening the future of the euro zone, the Reuters foreign exchange poll taken in the last few days also found.
It appears the perception that the British economy is in better shape than Europe's, long-held whether justified or not, will give sterling no further push higher in coming months.
The poll predicts the pound will remain firm against a broadly pressured US dollar but weaken later in the forecast horizon, at $1.61 in a month, $1.59 in three and $1.58 in a year.
The US currency is set to come under pressure from hundreds of billions of dollars of additional stimulus through purchases of agency securities by the Federal Reserve.
How much the Fed buys will depend on how quickly the US unemployment rate falls from the current 7.8 percent. The latest evidence on that is due at 1230 GMT.
Against the euro, sterling should hold its ground, given widespread expectations that its economy is on a slightly more solid footing than the euro zone, even if Britain is highly dependent on exporting to the 17-member currency bloc.
The forecast has euro/sterling around 80 pence in one, three, six and 12 months, ranging from as weak as 87p to 72p.
"We think with the latest third-quarter GDP report we are entering a period in which the UK is going to outperform the euro zone for the next three to four quarters," said Kiran Kowshik at BNP Paribas.
One bit of good news for Britain if the forecast is correct is that there is scant evidence that a weaker pound over past years had any material bearing on Britain's exports to Europe.
"The decreasing likelihood of further near-term easing in the UK may lend relative policy support to the pound even in the absence of renewed euro area credit stress," said Peter von Maydell and Anezka Christovova at Credit Suisse.
"Meanwhile we continue to expect sterling to benefit from reserve manager flows," they added in an e-mailed note.
The prospect of Britain's growth rate falling sharply in the current quarter after an unexpectedly strong Olympic Games boost in the one just gone by, is perhaps one reason for caution in expecting sterling to climb any higher.
Indeed, the potential that Britain could even slide back into recession from which it just escaped has at least kept alive the prospect that the BoE could restart its money printing, which totals 375 billion pounds so far.
Some analysts still believe the BoE printing presses have another 125 billion pounds left to run.
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