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What to make of the sterling quagmire

While the UK government’s apparent U-turn on fiscal policy offers some hope of relief for sterling, we think the outlook remains precarious. We continue to expect that sterling will lose further ground against the US dollar in the near term. But while the risks remain skewed to the downside, we don’t anticipate a major, broad-based sterling depreciation on the scale of those in 2016, 2008, and 1992.

In view of the wider interest, we are also sending this FX Markets Focus to clients of our UK Economics and UK Markets Services.

Drop-In: Join our online Asia briefing on Thursday, 27th October for the latest on China’s Party Congress, yen weakness and regional central bank hawkishness. Register here.

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