This is London – It also led many in the City to believe the Bank favours a weak currency, prompting a series of downbeat forecasts today. “I’m super bearish on the pound,” said Hans-Guenter Redeker, the London-based head of foreign exchange at BNP Paribas.
“The Bank of England has made it clear it can’t afford a stronger currency.” He forecast the pound would fall to $1.50 in 12 months.
John Taylor, chief executive of New York hedge fund FX Concepts, said sterling will “get crushed” and sink as low as $1.45 in the coming months.
“The fundamentals in the UK are certainly not pretty,” he said. “It’s a race for the least ugly of the candidates, and I would argue that the US is going to be the least ugly for a while.” Others were more upbeat and said the measures taken by the Bank and the Government to ease the slowdown will boost sterling. HSBC predicted the pound would rise to $1.75 by the end of next year — midway between the high of $2.12 in November 2007 and the low of $1.38 in March this year.