If You Must Sell GBP
The BoE decision on Thursday will probably be a non event as the BoE has already played several ‘tightening’ cards over the past month with the quarterly inflation report and FLS tweaks; better to focus on the Autumn Statement instead. However, with sterling advancing on all fronts to multi-year highs and persistent doubts over the economy’s ability to continue outperformance, some investors are starting to look for exit strategies. We have some sympathy with this view, but caution against a zero-sum approach. Sterling’s risk status has never been stable and differentiation is necessary, which brings relative value into the picture.
Read the full report: UBS