Britain'S "Hard Off Europe" Will Make The Pound Depreciate Sharply And The Economy Will Face Downgrading Risks.

Although the pound has fluctuated considerably this year, some analysts say the pound has not reached the trough.

Stephen Gallo, head of European foreign exchange strategy at BMO Capital Markets, told the CNBC news via mail that their prediction target is that the exchange rate of the pound against the US dollar will fall to 1.20 in three months, reaching 1.15 in six months. Montreal,

Although the Bank of England governor Carney (Mark Carney) announced his stay, the pound rebounded on Tuesday (November 1st), but the overall pressure on the pound remains unchanged.

Carney has announced his appointment as governor of the Bank of England. He returned to office only as early as 2019. This is the same as the US dollar index this week, which raised the pound's exchange rate against the US dollar by 0.5%.

But on Thursday's BOE monetary policy meeting, Carney will say that the Bank of England will maintain.

Prudent attitude further limits the increase.

Stephen Gallo predicts that the pound will continue to fall in the next six months before the stability of Britain's European independence event, because the other countries of the United Kingdom and the European Union may strengthen the political edge policy.

The agency estimates that the Bank of England will temporarily take a wait-and-see attitude and will not act hastily to avoid a vicious cycle of weakness in the pound.

According to a recent report by S&P Global, the pound has lost 15% of its value, but only 7% of its depreciation is due to a referendum.

The report said that after the vote was decided in June, the pound had fallen sharply, and in the short term, the pound still had little chance of rising to return to its fair value.

The report said that the recent devaluation of the British pound was due to Britain's departure from Europe, which made London's financial circle in the UK.

There has been a decrease.

The Bank of England (BOE) also needs to take positive actions to weaken the adverse impact of Britain's disengagement on the UK's short-term economic growth.

There have been some big fluctuations in the pound exchange rate since June of this year.

The initial change in the pound's exchange rate was dramatic.

From 1.50 high to 31 years low: 1.32.

The pound remains under pressure, and its current exchange rate is 1.22.

The pound's exchange rate plummeted by 6% in the first week of October.

What worries us now is that Britain's "hard off Europe" will further depreciate sterling.

Since the beginning of this year, the pound has fallen by nearly 17% against the US dollar.

The global standard & Poor's report shows that sterling has become accustomed to large fluctuations in nominal exchange rates.

Since 1975, the sterling exchange rate has experienced eight stages of decline.

The exchange rate of the pound against the US dollar experienced the biggest decline in 1981.

In 1982, it experienced another considerable decline, with a decrease of 19% per time.

The report also added that between 2000 and 2007, whether purchasing power parity (PPP) was measured or adjusted according to current account adjustments, the importance of the financial services industry was increasing, leading to the conclusion that the sterling exchange rate deviated from its equilibrium value.

Purchasing power parity refers to the ratio between currencies between the two countries, which should be equal to the price level of the two countries.

It is a measure of the inflow and outflow of national goods and services.

Meanwhile, the Moodie rating agency (Moody) warned that if the United Kingdom failed to gain access to the EU's single market after leaving Europe, the British economy would be at risk of downgrading.

Moodie's rating agency said in a statement on Wednesday that if the United Kingdom failed to gain access to the European Union's single market after leaving Europe, the sovereign rating of the British AA1 would be downgraded, and the medium-term economic growth in the UK would be seriously weakened. Meanwhile, the credibility of the British fiscal policy would also be impaired.