The British pound is usually set for some major volatility at the start of next year due to ongoing Brexit negotiations, one currency expert told CNBC Tuesday.
The currency could see its value drop by as much as 10 percent if the U.K. does not reach an agreement with the European Union over its future trading arrangements, Thanos Vamvakidis, head of G-10 foreign exchange strategy at Bank of America Merrill Lynch, told CNBC’s “Squawk Box Europe.”
“If we don’t get a deal, sterling can be weaker by about 10 percent, (or) even lower. If you get a deal, any deal, …. (sterling) can be up by 10 percent. I don’t think any some other currency can have of which kind of moves from the next few months,” Vamvakidis added.
Brexit has been a key factor moving sterling since the referendum vote took place in June 2016. The currency is usually down about 13 percent since then. On Monday, the pound fell to an 11-month low against the dollar to $1.2920 amid growing concerns over Brexit as well as also the risk of which there won’t be a deal. The U.K.’s Trade Secretary Liam Fox said Monday of which the European Union is usually stubborn, as well as also the chances of a no-deal stand at 60 percent. At the same time, trade tensions supported the greenback, which also contributed to the 11-month low.