Sterling licked its wounds near a seven-year low against the dollar on Thursday, hampered by worries Britain may exit the European Union, while a rebound in oil prices helped stem buying in the safe-haven yen.
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You might decide now is the time to act if you have a currency requirement and are converting from sterling.
However, he said that when the pound does start falling it is very hard to reverse.
The Federation of Indian Chambers of Commerce and Industry (FICCI) warned against “considerable uncertainty” for Indian businesses operating in the United Kingdom and Europe at the prospect of a British exit (Brexit) from the EU.
The Jewish Chronicle noted that top Jewish business leaders including Lord Sugar, Sir Martin Sorrell, Sir Philip Green and Sir Victor Blank say they would vote for the United Kingdom to remain in the Union in June’s referendum.
Sterling hovered at $1.3910 GBP=D4 near seven-year lows against the dollar on Thursday and was on course for its worst weekly performance since 2009. Pound Sterling has crashed following an announcement by London Mayor Boris Johnson that he will campaign to leave the European Union. The Bank of England has also alluded to the fact that it is open to fresh stimulus if economic conditions deteriorate over coming months and this has weakened the pound further.
The pound may fall between 15% and 20% against the dollar, while United Kingdom economic growth could also drop 1.5 percentage points in the event of a Brexit, according to researchers at the bank.
Lukman Otunuga, research analyst at foreign exchange broker FXTM, said, “This latest development has provided yet another reason for the Bank of England to push back interest rate expectations”.
Moreover, uncertainty could hit United Kingdom bank stocks, although they should be relatively well placed to weather a growth slowdown.
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The pound is at its lowest level against the United States dollar since March 2009 and at its lowest level for more than a year low against major currencies such as the euro and the yen. The UK’s sterling might extend its losses against the greenback and fall to as low as $1.35 in a week from now, as concerns over financial stability of Canary Wharf in the fragile political environment are fending investors off the City of London. Currently, the United Kingdom economy is nearing the point where a hike in borrowing costs would be desirable, staving off bubbles in financial sector. These capital outflows would also weaken the pound. The United Kingdom has had a strong debate on the process and has finally set the date of June 23 to decide on the fate of the United Kingdom.
