Sterling Reaches $1.40 As RLAM's Greetham Warns Of 'sudden Drop In The Pound'

Trevor Greetham of Royal London Asset Management

Trevor Greetham of Royal London Asset Management

The pound reached a fresh post-Brexit high in early morning trading, passing $1.40, but Royal London Asset Management's Trevor Greetham warns the strength in sterling is unlikely to last.

The $1.40 level is significant as it has been the pound's floor against the dollar since the 1980s.

Sterling is one of the strongest performers so far this year, largely due to the weakness of the dollar, and the best-performing G10 currency in the past six months having risen 7.3 per cent against the dollar.

UK inflation 'peaks' as sterling hits post-Brexit high

However, Greetham head of multi asset at RLAM, dismissed sterling as being just one of many currencies gaining against the dollar, rather than gaining on its own merit, adding that sterling's weaker position against the euro supports this.

Sterling was relatively flat against the euro at €1.14 as of 3.30pm, while the pound's level against the dollar hovered around $1.40.

"If the recent strength in sterling was linked to progress on Brexit, you would envisage seeing UK interest rate expectations rising, relative to the US," Greetham said. "In fact, the reverse has happened. The dollar has weakened despite a marked increase in US interest rate expectations relative to the UK and other countries.

"This creates the risk of a snap back in the dollar and a sudden drop in the pound, regardless of the state of the negotiations in Brussels."

More news

Back to Top

RECENT NEWS

What A Rising VIX Means For Pension Funds

Wall Street’s latest selloff has moved beyond a technology-sector wobble and become a broad market event. The Nasdaq C... Read more

Behaviour Cannot Fix A Portfolio Construction Flaw

A Retiree Shouldn't Be Asked to Behave Their Way Out of a Portfolio Construction Problem Why behavioural coaching shoul... Read more

Behavioural & Retirement Portfolio Resilience

Behavioural Survivability and Retirement Portfolio Resilience Why the lived experience of market recovery matters as mu... Read more

Australia's Rate Rise Bites: Highest In 15 Years

The Reserve Bank of Australia has lifted interest rates to their highest level since 2011, and its governor admits the w... Read more

October Retirement Portfolio Resilience Assessment

Markets stabl Read more

Gyrostat September Retirement Portfolio Resilience Assessment

September Retirement Portfolio Resilience Assessment Markets have fallen. The price of risk has risen. ... Read more