Pound forecast bleak
5 June, 2019
The last month has been a torrid one for the Pound, as we have seen it make almost continuous daily losses across the board, but most noticeably against the Euro and Dollar – now sitting at around 4 ½ moth lows against both.
Since Theresa Mays resignation Brexit uncertainty has reached fever pitch again, with over 10 Tory MPS throwing their hat into the ring for the party leadership.
With Boris as the lead runner, this could well see a Harder Brexit which would be bad for the Pound. And all this uncertainty does not help a currency.
The 1922 committee last night announced that to try and help simplify the process there wold be round voting to decide who the 2 candidates would be – with 16 MP votes required in Round 1, 32 in Round 2 and so on, until the 313 Tory party votes are cast and we are left with 2 runners.
It expected to be decided this week, but as mentioned with Hard Brexit Boris the favourite things are looking bleak for the Pound. Many of the major banks have slashed their forecasts for Sterling this year as a result of a potential No Deal/Hard Brexit, and as such in the short-term the Pound is likely to remain in free-fall.
What should be noted is that previously when No-Deal was a possibility, exchange rates were 5/6% lower against the Euro. So whilst things may seem bad now, they could well get a whole lot worse.
Today is a quiet day in the way of data (aside from US ISM manufacturing this afternoon) and as such it is expected the market trend will continue, at least until we have news of the Tory Leadership candidates.
It does seems like a bad episode of a Noel Edmonds show at present, as Trump looks to barter a UK Trade deal whilst allowing the US to stealing parts of the NHS, and Boris stands firm stating that we that leave the EU “Deal or No-Deal” come October 31st.
With this in mind, and the Pound set for potentially further losses you may like to strike your own deal now, before what the market can offer you becomes considerably less.
Readers may like to consider this for any upcoming currency purchases, and speak to us about some of the ways we can help reduce your risk – including Forward contracts, market orders and tranche trading.