Standard Chartered warns of political instability.
Cable is back near the lows of the day at 1.4853 after a rally failed ahead of 1.4920.
April is the best month of the year for the pound -- it has gained in 10 consecutive years. It's been a modest start, up about 20 pips in choppy trading since the start of the month. Yesterday's rally toward 1.5000 was quickly erased.
Standard Chartered reiterated that it remains underweight GBP, saying political and monetary policy uncertainty will weigh. They forecast 1.45 in Q2, 1.48 in Q3 and 1.50 at year end.
They say a hung parliament is the likely outcome of the election. They see a Conservative-led government as negative for GBP due to tight fiscal policy and the potential for an EU referendum. A Labour-led government would by neutral-to-positive.
In my experience, politics in stable democracies is always wildly overstated.
The FT has an interesting story today about the UK's obsession with a US decline and a great cartoon to go with it.
