The Pound Sterling has enjoyed and Archimedes-esque Eureka moment. Hopefully, it won’t be caught short running nude through the street to brag to its head of state anytime soon… For the first time in a good while (if not ever) it has been the words of Jeremy Corbyn that kick started the rise in value within the domestic currency. Corbyn, around 11:25, proclaimed to an audience of Labour Party activists in Hastings that a second referendum “was on the table”. Alongside confirmation from Downing Street this morning that the Prime Minister will allow informal votes to gauge confidence on her Plan B(s) on Monday, the rhetoric from Corbyn suggested that Brexit Referendum II could gather a majority. Accordingly, markets raced to reward the Pound with an additional 25 basis points of value – as seen within GBPEUR below.
HSBC publicly announced that they are shifting their stance towards Sterling to bullish, willing to hold long positions on the Pound. Analysts at HSBC have suggested that should a second referendum occur and should the public vote to abandon Brexit, the Pound could rally by as much as 20%. The forecasts certainly seem optimistic, however, these perceptions do contribute towards understanding an appetite for British assets at different outcomes of the Brexit impasse.
Discussion and Analysis by Charles Porter
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