Pound could fall to parity vs. USD on hard Brexit concerns - Morgan Stanley
|According to the leading US investment banking giant, Morgan Stanley, the nervousness in financial markets over the “hardline” approach adopted by both UK PM Hopefuls Boris Johnson and Jeremy Hunt risks knocking-off the pound from its current level of $1.24 vs. the greenback to the lowest level since it almost reached parity in the mid-1980s.
Key Quotes (The Guardian):
"The pound has come under intense selling pressure since Prime Minister May withdrew from her party leadership position, leaving markets with increased concern that the UK may be heading towards a harder Brexit."
"Should this scenario materialize, pound-dollar could fall into the $1.00-$1.10 range."
"Markets have adjusted these probabilities sharply lower."
"Should the new PM adopt a moderate negotiation stance, we expect the pound-dollar to trade within its current range with $1.20 as the lower end of the range. Should the new PM strike a deal with the EU and bring it through parliament, the pound may rally. The stance of the Labor party will be important for the pound's valuation too. Should the Labor leadership move closer to a pro-EU approach, the pound may reach $1.35."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.