One of the world’s largest investment banks has spoken.
Financial consultants Morgan Stanley, as well as Morgan Grenfell, one of the world’s oldest banks and now a part of Deutsche Bank, have claimed that the potential of the Labour party winning a general election would be enough to see the UK’s currency go into a free fall.
At the time of writing, £1 will get you €1.10, but predictors have that falling to a 1:1 exchange rate or further for the Sterling.
Foreign exchange strategist Hans Redeker told The Express that “The Labour Party’s agenda suggesting higher taxes on corporates and high income earners may weaken investment further, and may even lead to substantial capital outflows.”
Meanwhile, Andrew Sheets, the chief cross-asset strategist at Morgan Stanley, told Bloomberg TV over the weekend (via The Independent) that in light of the full Brexit in the coming months, “Markets will focus on this idea that the core of Europe, France and Germany, are working toward a stronger European Union, making a push toward reform that we haven’t seen in a number of years. That’s structurally bullish for the euro.”
This would be the first time since the Euro was introduced 18 years ago that the currency’s may trade at one-to-one, and the increase in the strength for the Euro will also see an uptick in the exchange rates against the US Dollar, which is currently standing at €1 to $1.18, but is predicted to go as high as €1 to $1.25 by early next year.
