From: Raggytash - PM
Date: 09 Oct 17 - 01:54 PM
DmCG The run on the pound occured immediately after the Referendum vote.
The pound has consistently traded at 10% lower against the Dollar and 15% below against the Euro since the vote.
There are few, if any, signs of it recovering those losses in the near future.

So we may see a further drop. The only surprise is that people are surprised.
The pound is currently at $1.32 and is probably still overvalued. A period of adjustment for the pound has long been expected.

See: The Telegraph 26 Dec 2015

The pound is one of the most overvalued currencies in the world and will suffer next year as the Government ramps up spending cuts and uncertainty about Britain’s future in the EU weighs on growth.

Analysts at Deutsche Bank warned that the Bank of England may not be able to raise interest rates “at all” if Britain’s recovery slows.

It believes the pound could fall as low as $1.27 next year and $1.15 in 2017 from about $1.485 today if the US Federal Reserve continues to tighten monetary policy and the Bank of England leaves interest rates on hold.

“We have various different ways of looking at currency valuations and what we find is that sterling is the most expensive currency out there at the moment - even including the dollar,” said Oliver Harvey, foreign exchange strategist at Deutsche Bank. Earlier this year, the International Monetary Fund said the pound was between 5pc and 15pc overvalued.


So the pound's recent fall is an overdue re-balancing of its value when compared with other currencies.