There is “no end in sight” for the pound’s “relentless sell-off”and its volatility “should pick up”, warned MUFG currency analyst Lee Hardman,
“It is the heaviest period of sustained pound selling since the autumn of 2016 when Prime Minister May clearly laid out her red lines for negotiations with the EU,” he said. Although the pound rout three years ago was followed by a recovery, a “similar rebound appears unlikely”, Mr Hardman warned.
Nomura’s Jordan Rochester believes that the pound could enjoy a brief recovery, boosted by “spending pledges, tax cuts and a mood change thanks to a new leadership”.
“But after the summer when it’s clear negotiations with the EU have gone nowhere, hard Brexit risks will likely come back into pound pricing once again,” he added.