The bookmakers’ odds have shifted as the likelihood of Britain voting to leave the European Union (EU) has increased. That is the message from the polls and the bookies, yet sterling doesn’t agree. The media, egged on by Mark Carney, the governor of the Bank of England, routinely report that the pound is collapsing at the mere threat of a Brexit vote. The strange part of this narrative is that I am struggling to see the pound’s collapse. In reality, it fell in late 2015 – as I described at the time – and has been rallying for the past three months.
The blue line shows the pound versus the dollar and the red line versus the euro. The former bottomed in late February while the latter bottomed in early April. Either reports of sterling’s demise have either been greatly exaggerated or this leading pollster is forecasting a vote to remain in the EU While the consensus belief is that the pound is the leading pollster, there could be another explanation. Last week saw disappointing US jobs numbers, which caused the dollar to fall sharply. That’s because weak jobs will likely delay the rise in US interest rates – something we keep on hearing over and over again. Lower rates reduce the demand for dollars, and so it falls. As currencies are more or less a zero-sum game, something else must rise. Last Friday, both the pound and the euro rose against the dollar.
After a career as an officer in the Grenadier Guards, Charlie spent 17 years as the Head of Absolute Return at HSBC Global Asset Management, managing more than £3 billion in client funds.He’s known and respected as a specialist on gold, crypto-currencies and momentum investing. In fact, he’s made over 200 appearances as a guest expert on various financial television programs. Charlie is the editor of the Fleet Street Letter.
SECRET ADVICE FROM A "BRAIN TRUST" OF GLOBAL EXPERTS
Take your insider’s seat at a table of global financial strategists it's taken 40 years to network together...
With their advice, you’ll be immediately plugged into a stream of expert insights you won’t find anywhere else in the world.
You’ll be right in the middle of the world’s most successful group of independent investment minds.
Experts based here in the US, and in the UK, China, Germany, France, Australia, India, Brazil, Spain, Portugal, and Argentina.
Rest assured you will “crisis-proof” your financial life... and make money while the rest of the world sits on the sidelines.
Click below for access to this network’s very best strategic thinking, analysis, and investment research, all in one easy-to-read weekly memo. Learn more
Agora Economics provides a long-term forecast of real total returns over the coming 10 years. The model forecasts annualized real returns and includes 8 factors, including valuation, demographics, interest rates, consumer economics and investment cycles.
ASX 2005682.10+26.70 +0.47%
CAC 405281.29+14.00 +0.27%
FTSE 1007310.64+46.74 +0.64%
HANG SENG27880.53-229.80 -0.82%
WP Stock Ticker
Agora Economics is a worldwide network of economists, researchers, and analysts.
We provide clear, consistent, and actionable investment advice often counter to popular economic perspectives.
Our organization is called “agora” for the ancient Greek marketplace of the same name… where society gathered to trade goods, exchange news, and share opinions.
Today, the global marketplace of competitive investment ideas from Agora Economics keeps you far ahead of mainstream thinking in the world of money.