Roger Bootle comments on the difficulty of forecasting exchange rates.
The historical record shows that most of the time it is incredibly hard to know in which direction currencies are going to move, never mind how far they will go, or when. Indeed, a study conducted some while back by the Bank of England concluded that anyone wanting to know whether an exchange rate was going to go up or down would be better off flipping a coin than listening to what economists have to say.
The pound may look like the dog’s dinner at the moment, but Bootle contends all too often it rises like a phoenix when you least expect it.
