Another major banks warns ‘Brexit’ supporters as GBP/USD falls below $1.39
Sterling continued its recent decline yesterday as the currency fell below $1.39 for the first time in 7 years as analysts once again warned that a UK exit from the EU could severely damage the UK’s growth prospects.
As the Pound fell against both the US Dollar and the Euro analysts at HSBC released a 50-page report warning supporters of a ‘Brexit’ of the consequences to the UK economy should it leave the EU, stating that Sterling could reach levels against the Dollar not seen since the heart of the mining strike in 1985. During that time GBP/USD traded at $1.10 and this is bad news for Sterling bulls as it suggests a ‘Brexit’ could cause a further 20% fall in the value of the pound, a significant drop made even more substantial considering Sterling’s recent fall of almost 11% over the past 6 months which has been accelerating since the beginning of the year.
With important economic data released later this morning (UK GDP Figures are released at 9:30am) we could see further falls in Sterling should the figure come out below expectations, making buying Euro’s or Dollar’s even more expensive for Sterling sellers.