Pound Sterling forecast – will it gain strength this summer against Euro, Australian Dollar, U.S Dollar and all major currencies?
Good morning to you all!
Sterling has faced a rocky few years of late and as all of you will be aware has lost a huge amount of ground against various major currencies.
Many of my clients have been asking me of late whether or not this is the start of the turnaround? Well, in truth I think it is against the Euro and Australian Dollar yet we still have a battle on our hands against the U.S Dollar and Swiss Franc.
The reason behind my thoughts are as follows…. The Euro Zone is finally showing the major cracks they have managed to smooth over for the past few years and with one central bank dealing with such a variety of economies in my opinion this only spells trouble going forward.
The Australian Dollar will more than likely still make the odd comeback along the way against the Pound however I think the main strength has now disappeared as they bring in the super tax for the mining industry and the potential (be it further down the line) of a hung Parliament will keep on holding it back – remember what happened to the Pound during our election?!
The U.S continue their fears of a double dip recession however the common saying is that when the U.S sneezes the U.K catches a cold which leads me to believe that this will hold us back from major gains for the time being, the problem is every time they show a poor data release investors will be wary of what is to come further down the line for the U.K.
The Swiss Franc appears to be going from strength to strength… the currencies reserves have increased four-fold in the past year and it is apparently now the most favourable currency for investors at present, this is mainly due to it being a ‘safer have’ compared to currencies of many other major economies now perceived as generally quite risky.. I know given the choice of the Euro Zone or Switzerland exactly where I would look to shift my funds with their current banking situation!
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Daniel Wright
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