Sterling under pressure

Sterling will remain under pressure in the near-term thanks to the increasing likelihood of a second round of quantitative easing by the Bank of England, a Reuters poll showed. In a year's time, however, sterling will appreciate against the US dollar as policymakers find a fix to the debt crisis plaguing the eurozone, Britain's close trade partner.
A poll of around 60 currency strategists taken this week showed they expect the pound to trade at $1.54 a month from now, $1.57 in six and $1.60 in a year. That compares with $1.63, $1.63 and $1.64 respectively in a September poll.
The median one- and three-month forecasts for sterling are the lowest since a poll taken in September 2010.
"Sterling downside comes in the form of QE2 from the BoE, which we believe will happen," said Tom Levinson, FX strategist at ING. "Our core scenario is that some sort of muddle-through approach is achieved by the eurozone in the next few months."
The BoE is expected to hold off on pumping more money into the economy when it meets on Thursday, but will add another 50 billion pounds to asset purchases in November, according to a Reuters poll of economists.
Sterling is expected to remaining flat against the euro over the course of the next year, trading at 85.9 pence in a month, 86.3 in six months and 85 pence in 12 months.