Back
14 Apr 2015
A weak coalition government best outcome for GBP - HSBC
FXStreet (Barcelona) - A weak Labour or Conservative coalition government might cause a GBP/USD bounce back towards 1.55 levels, views David Bloom, Global Head of FX Research at HSBC Bank & team.
Key Quotes
“A Labour victory would bring market worries about a fiscal deficit to the fore, despite Labour’s best efforts to allay such concerns. An outright Conservative victory would bring an EU “in-out” referendum.”
“The best outcome for GBP may now be a weak coalition government. A weak Labour coalition is unlikely to be able to make sweeping fiscal changes and a weak Conservative coalition would no longer be committed to an EU referendum. In these instances we could see GBP-USD bounce back towards its “fair value” of ~1.55. Swings in the polls are now pivotal.”
Key Quotes
“A Labour victory would bring market worries about a fiscal deficit to the fore, despite Labour’s best efforts to allay such concerns. An outright Conservative victory would bring an EU “in-out” referendum.”
“The best outcome for GBP may now be a weak coalition government. A weak Labour coalition is unlikely to be able to make sweeping fiscal changes and a weak Conservative coalition would no longer be committed to an EU referendum. In these instances we could see GBP-USD bounce back towards its “fair value” of ~1.55. Swings in the polls are now pivotal.”