GBP: Uncertainty discount is expected to recede – ANZ

Brian Martin, Senior International Economist at ANZ, suggests that they do not forecast that sterling will recover all of its decline as considerable political uncertainty will remain, but a deal would reduce current economic uncertainty and allow GBP to rise 5–7% in coming months.

Key Quotes

“Since the Brexit referendum, the correlation between the twin budget and the UK’s effective exchange rate has weakened dramatically to -0.06.”

“If an agreement is reached, a considerable proportion of sterling’s discount can unwind.”

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.