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6 Feb 2015
Political uncertainty negative for GBP, but sterling assets might remain positive – Rabobank
FXStreet (Barcelona) - According to Jane Foley, Senior Currency Strategist at Rabobank, the political uncertainty might weigh down the pound, but sterling assets might see an unusual outcome by still offering relatively attractive yields.
Key Quotes
“Political uncertainty is almost always a negative factor for a currency. The May 2015 UK general election is threatening to bring more uncertainty than usual.”
“The country is faced with the prospect of a hung parliament and of a smaller party playing the role of kingmaker.”
“Dependent on the election result the country could then go to the polls again in 2017 (or perhaps earlier) to vote on whether the UK remains part of the EU.”
“In ordinary circumstances this would likely be enough uncertainty to keep the pound under significant pressure.”
“However, this year there may be extenuating circumstance in that sterling assets still offer relatively attractive yield.”
Key Quotes
“Political uncertainty is almost always a negative factor for a currency. The May 2015 UK general election is threatening to bring more uncertainty than usual.”
“The country is faced with the prospect of a hung parliament and of a smaller party playing the role of kingmaker.”
“Dependent on the election result the country could then go to the polls again in 2017 (or perhaps earlier) to vote on whether the UK remains part of the EU.”
“In ordinary circumstances this would likely be enough uncertainty to keep the pound under significant pressure.”
“However, this year there may be extenuating circumstance in that sterling assets still offer relatively attractive yield.”