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- “Heightened uncertainty” over Brexit could send the pound lower, which is the opportunity to buy pound cheaper - UBS
“Heightened uncertainty” over Brexit could send the pound lower, which is the opportunity to buy pound cheaper - UBS
“Heightened uncertainty” over Britain’s divorce with the European Union could be the trigger that sends the pound even lower, making it more attractive for investors to buy, according to UBS Global Wealth Management.
The pound has been trading above the 1.30-level against the greenback over the past month. But increased uncertainty could send the sterling to levels of about 1.24 or 1.15 against the U.S. dollar, said Tan Teck Leng, a foreign exchange analyst at UBS.
“We don’t think that Theresa May is able to get the current deal through the U.K. parliament. It is not likely to happen and with that, it opens the door to general elections,” Tan told.
“Is that higher or lower uncertainty? It is a lot higher because you don’t know the parties, if they were to campaign, are they going to campaign on a harder Brexit or softer Brexit,” he added.
“If you get a no-deal Brexit, it is not going to be 1.24, it is going to be 1.15 or below — that is the reality. Now, what can take the pound down to 1.24? The simple trigger would be just pure heightened uncertainty,” he added.
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