Pound Awaits ‘Hard Brexit’
The British pound is under further pressure today, falling for a third straight day after the terror attack in Manchester that left 22 people dead and scores more injured. At 4.45pm (GMT) the British currency was trading at $1.2940 against its US counterpart, down from $1.2962 in yesterday’s trading.
Police in the UK believe that the suicide bomber who carried out the terrorist attack, didn’t act alone and that another attack may happen, which may keep the pound under pressure for the foreseeable future.
There is also the question of Brexit negotiations to come and as each day goes by, many are starting to predict that Britain is headed for a “Hard Brexit” which will cause the pound to suffer further losses.
The Elections coming up this month in which British Prime Minister Theresa May is expected to win in a landslide may provide some temporary support for the sterling but many don’t expect this to last long
“We’ve literally gone short on the pound at the end of last week,” said Mark Dowding, a fund manager at BlueBay, which oversees $55.5bn in Assets.
“We think you’re going to be facing a Brexit that to us looks like it’s going to be a hard Brexi,” he added.
Mr Dowding predicts that the pound could fall below $1.20 as the year unfolds when the results of Brexit negotiations start to filter through to the market.