The British Pound Is Trading At A 7-Week Low, And Some Analysts See Further Downside

The British pound's declined continued on Wednesday and was trading at $1.2178, marking the lowest level it has been trading at in seven weeks.

According to the U.K.-based Independent, the British government released its annual budget on Wednesday at 12:30 p.m. London time (7:30 a.m. ET), which is expected to convey the message that the country is well positioned to navigate the ongoing Brexit-related concerns.

Underlying Issue: Brexit

The problem is that the Brexit process appears to be anything but smooth, and the path forward is uncertain. For example, the budget assumes a reduction in the country's growth forecast from 2018 through at least 2021 although growth in 2017 is expected to be better than expected.

Bloomberg quoted analysts at UniCredit who told clients that the budget's "fiscal neutrality" isn't expected to offer any support to the currency which traded as low as $1.1841 last year. The analysts also suggested that the budget leaves enough room for the government to implement new measures if the economy deteriorates during the ongoing Brexit negotiations.

"The U.K. economy is slowly slowing and the future uncertainty is steadily increasing," Bloomberg also quoted analysts at Societe Generale as saying.

Finally, Bloomberg quoted Kathleen Brooks, EMEA Research Director at City Index who suggested that the pound could see downside to $1.20 and "stay there for some time."

Related Link: Pound Woes Could Be Good News For These U.K. ETFs

Related Link: Post-Brexit, Banks Could Be Problems For U.K. ETFs