Outlook for the pound in 2015 - Lee Hardman, Currency Analyst at Mitsubishi UFJ Financial Group, Inc. explained conditions surrounding the pound and outlook going forward.
"The latest odds from bookmakers in the UK stand in contrast to the signal from the opinion polls by indicating that it is more likely that the Conservative party will form the next government."
"A continuation of the current coalition government between the Conservatives and the Liberal Democrats is viewed as the most likely outcome. It is followed closely by the likelihood of a Conservative majority and minority governments and Labour minority government."
"The odds of the UK leaving the EU will be higher and fiscal policy tighter under a Conservative government. The pound is likely to weaken and volatility increase closer to the general election although the impact may prove only temporary assuming a stable government is formed."
"In these circumstances, we expect EUR/GBP to rebound modestly in Q2 before ending the year lower again at 0.7100. With the US dollar likely to continue to broadly outperform, GBP/USD should also decline further towards the mid-1.4000’s in 2015."
"The latest odds from bookmakers in the UK stand in contrast to the signal from the opinion polls by indicating that it is more likely that the Conservative party will form the next government."
"A continuation of the current coalition government between the Conservatives and the Liberal Democrats is viewed as the most likely outcome. It is followed closely by the likelihood of a Conservative majority and minority governments and Labour minority government."
"The odds of the UK leaving the EU will be higher and fiscal policy tighter under a Conservative government. The pound is likely to weaken and volatility increase closer to the general election although the impact may prove only temporary assuming a stable government is formed."
"In these circumstances, we expect EUR/GBP to rebound modestly in Q2 before ending the year lower again at 0.7100. With the US dollar likely to continue to broadly outperform, GBP/USD should also decline further towards the mid-1.4000’s in 2015."
