Sterling facing a potential drop of a further 16%
The pound has dipped by almost 18% against the dollar and 12% on foot of the Brexit vote.
A recent poll by Reuters stated that ‘the pound is likely to drop around 5% to $1.15 against the dollar after Ms May triggers Article 50’.
There is no question that Sterling has endured a complete landslide since the UK voters chose to leave the EU on June 23rd. The major European market analysts are warning that the worst has yet to come.
George Saravelos, Deutsche Banks’s Global Co-Head of Foreign Exchange has warned on numerous occasions that the pound could plummet as low as $1.05 against the dollar, or another 16% as the intensely complicated nature of Brexit starts to become clear.
Commenting on the Brexit negotiations that are coming down the line, Saravelos added: "Even though intentions are quite positive on both sides, we're very concerned about the lack of time to complete a deal in two years, and we worry that negotiations will get stuck around this issue of the payment which the UK has to make to leave the EU, and things will stall quite quickly”.
Mr Sarvelos final remark is a definite call to action for UK businesses as he is expecting sterling to drop "below $1.10, down to $1.08 or $1.05".
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