1. Newsroom
  2. Change of fortune for the British pound
Menu
Analysen 08.06.2020

Change of fortune for the British pound

Change of fortune for the British pound

Our Global Head of Forex Strategy, Peter Kinsella, discusses our updated outlook on sterling



The outlook for GBP exchange rates has become much more ominous. The COVID-19 pandemic has led to a significant decline in growth and consequently an increase in government indebtedness. The Bank of England (BoE) has cut interest rates to 0.1% and restarted its quantitative easing programme, as had been expected by many analysts. However, the BoE is said to be seriously considering the possibility of introducing negative deposit rates. This would be the first time that a country with a large current-account deficit applied such a policy. We think that this would be a highly negative development for GBP exchange rates, due to the importance of portfolio flows in balancing the UK’s current-account deficit.

A second risk looming on the horizon is the ongoing state of EU–UK trade negotiations. EU Chief Negotiator Michel Barnier has noted that little substantive progress has been made in the talks. Consequently, we think that the chances of the EU and the UK failing to agree to a trade deal are around 50:50. This risk will crystallise as we move into late June and nearer to the UK’s self-imposed negotiation deadline. As a result of these factors we now anticipate that sterling will weaken over the coming weeks and, at a minimum, we expect that GBP exchange-rate volatility will increase materially.

Our expertise

Peter_Kinsella_150x150.jpg
Peter Kinsella
Global Head of Forex Strategy

Expertise

Diskretionäres Portfolio-management: Sie haben die Zügel in der Hand

Ihre Ziele und Wünsche sind einzigartig – genauso wie unser Ansatz im diskretionären Portfoliomanagement
Mehr
Expertise

Swiss & Global Equities

Why Swiss equities now? This market offers equity investors the stability and agility they need to navigate this volatile period. 

Read more
Expertise

European Equities

European equities offer unrivalled opportunities in terms of breadth of sector and market exposure.

Read more

Meistgelesene News

Analysen 10.02.2021

COVID-19: Die UBP hält Sie auf dem Laufenden

Seit dem Ausbruch des Coronavirus begleiten und unterstützen wir unsere Kunden während dieser ungewöhnlichen Zeit einer weltweiten Gesundheitskrise. Die Bank informiert Sie regelmässig über die Anpassungen ihrer Massnahmen an die von den Gesundheitsbehörden vorgegebenen Vorsichtsregeln. Ausserdem kommen unsere Experten zu Wort, welche auf die Auswirkungen der Pandemie auf die Weltwirtschaft und die Finanzmärkte eingehen.

Analysen 17.12.2020

UBP Investment Outlook 2021

Schöne neue Welt

Analysen 24.11.2020

Perlen im SMID-Cap-Segment in Europa und der Schweiz

Unternehmen kleiner und mittlerer Kapitalisierung verzeichnen oftmals höhere Wachstumsraten und Renditen als Grosskonzerne. Es ist einfacher, ein kräftiges Wachstum von einer kleineren Basis aus zu generieren. Die sogenannten SMID Caps bieten Anlegern eine Positionierung in langfristigen Wachstumstrends.


Auch lesenswert

Analysen 06.05.2021

Why the Japanese market is performing well again

Japan’s equity markets have outpaced other major developed market equities in both 2020 and year-to-date in 2021 as the world seeks to transition to a post-pandemic recovery.

Analysen 04.05.2021

Positive performance defies volatile markets

The first quarter of 2021 was positive for most asset classes. However, financial markets were far from calm.

Analysen 29.04.2021

A defining moment for companies tackling climate change

The year 2021 may well turn out to be decisive for climate action.