QUESTION: Martin you appear to be very bearish on the British pound when comparing with the Us Dollar. Does the outcome of Brexit make any difference to your view.?
ANSWER: The British Parliament under the direction of Prime Minister May has been a disaster. She was a “Remainer” in her heart and the performance of the negotiations reflects that reluctance to leave the EU. The forecast our system has been making on the pound is based upon the performance of the market – not fundamentals.
Still, the fundamentals are reflected through confidence which then shows up in the price action of markets. The decline in the pound has reflected May’s inability to make a deal. Her strategy appears to be one who is on the payroll of Brussels – not the British people. It appears she refuses to negotiate and hopes that it will come down to a hard exit of her deal. This is what she is counting on and there can be a no-confidence vote until December to boot her out.
It is beside me why British politicians do not simply look at their own data and the facts. The UK has experience lower economic growth ever since it joined the EU. It loses just about every argument in the European court. Here is a clip from the Guardian on December 30, 1998, which showed even back then that 58.5% of trade in Britain was outside the EU. Britain cannot enter any trade deals with anyone without the approval of all 28 members of the EU. If just one objects, the deal is dead.
Perhaps PM May sings Frank Sinatra’s song My Way in the shower every morning to boost her spirits. BREXIT has been turned into a joke.