The discussions “show us what actually matters,” she said, and offers context on whether shifting exchange rates are “an outside swing on a day or an actual repricing.”
July 24 (Bloomberg) - For the world’s most accurate predictor of the British pound, it all started with the wake-up call of Brexit.
- Monex USA was most-accurate predictor of pound last quarter
- Firm sees currencies as a window into the country’s management
Pound forecasters at Washington-based Monex USA Corp. were the top-scoring in Bloomberg’s second-quarter accuracy ranking. To them, the bet comes down to the ability of the nation’s leadership to ensure stability in the wake of the UK’s exit from the European Union, the pandemic, and high global interest rates.
“The Brexit situation is really what woke us all up about the geopolitical changes that were happening,” Juan Perez, director of trading at Monex, said in an interview. “Ultimately, we feel currencies are a way to measure a country’s management abilities.”
The pound is still among the year’s best Group-of-10 currency performers against the US dollar, lagging only the Swiss franc. While it remains more than 2% weaker than it was when the UK officially left the EU, the currency has been supported by the Bank of England’s aggressive monetary tightening campaign. The pound is up more than 6% this year to $1.285.
That’s an area where Monex expects the currency to linger as the nation faces a key test with economic growth and inflation. Perez, along with the firm’s Vice President of Dealing and Trading John Doyle and trader Helen Given, sees the pound hovering around $1.28 through the end of the year and reaching $1.29 early next.
For Given, those forecasts reflect the team’s conversations with clients, which offer insight on both short- and long-term currency risks.
