Kamal Sharma, Currency Strategist at London-based Bank of America (BofA), offers a bearish outlook on sterlingpredicting further declines this year.
Key comments
“Sterling’s fall from grace has been epic given the euphoria of the past year and in many ways has caught the investment community by surprise.”
“Threadneedle Street faces ‘unique’ challenges, including Brexit, that are creating serious supply problems.”
“This has led to a confusing communication strategy: raising rates in the face of a sharply slowing economy is never a good image for any currency.”
“We feel something is changing in the UK with the BoE becoming harder to crack and less transparent; a lack of discussion and recognition that Brexit has been a significant headwind for the supply side and the feeling that the BoE is losing control over its mandate.”
Source: Fx Street
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