Looking beyond pound v dollar, things are even worse for the pound.
Against a trade-weighted basket of major currencies, sterling hit a 33-month low on 30 July
“Sterling’s recent tumble suggests that a no-deal Brexit could take the pound into uncharted territory,” says Silvia Dall’Angelo, Senior Economist at Hermes Investment Management.
Against the dollar, that could mean $1.05 to $1.10 but, “Given the tendency for financial markets to overshoot, no-deal Brexit could easily push the pound to parity with the dollar which has never happened before.”
She adds:
“Going forward, there is scope for wider ranges of value for the pound, including the possibility of an increase if MPs are able to successfully block a no-deal Brexit in Parliament, but realistically, the next few months don’t hold much promise for the currency.
“September and October could be wildly volatile months for sterling.”
