The British pound is in for some massive gains against it’s US counterpart according to one analyst as the threat of a hard Brexit subsides which will allow the UK economy to get back on track after many years of uncertainty which was caused by the indecisiveness on whether to remain in the EU.
Since 2016, the UK economy, one of Europe’s biggest has been struggling with the fallout from a shock decision by the UK population who voted to leave the EU, but as everything became more clear, it was obvious that the people didn’t know exactly what they were voting for and if it was a clean break from the EU or there would be many strings attached.
Now with the latest parliamentary elections over, and a government in place with a solid majority, the major hurdles have been removed such as political instability and the hard decisions can be made with no interference to get the UK economy back on track.
This is welcome news for the British pound as it has remained relatively subdued during this period of uncertainty and now is the time for it to come out of it’s shell and regain its former glory.
Michael Harris, founder of Cribstone Strategic Macro, predicted the currency could rise sharply as investors revaluated the U.K.’s long-term potential.
“What we’re going to get is a country where everyone has been on hold, this is massive pent-up demand, and as soon as it becomes clear that there’s an investable case here based upon some clarity of the direction of this country, the pound has to rerate. It’ll be one of the biggest trades in the world.” he said
Mr Harris also noted that at currently prices, the pound is massively undervalued and believes with the new government and their ability to push through legislation the threat of a no deal Brexit has vanished and soon as this becomes apparent to the market the British currency will take off like a rocket
“I don’t know whether it’s going to $1.55 or $1.75, but I do know this, the pound is going to go huge. Maybe it’ll take 18 months, maybe it’ll take 24 months, but the idea that after the election people are still talking a hard Brexit is absolutely absurd.” he added.