The British pound could fall to as low as $1.20 against the US dollar before the fallout over the UK’s decision to leave the European Union is played out says Shenzhen, China-based money manager, JSW Corporation.

After plunging to a 31-year low midweek below $1.28, there is speculation among the world’s biggest currency traders that the pound could track to parity with the US dollar. Despite this, experts at JSW Corporation think the forecast is over-pessimistic.

“It’s easy to become overwhelmed by the sheer weight of bearish sentiment towards sterling but the consensus often gets it very wrong,” explained Vivian Wang, Chief Economist at JSW Corporation.

You have to remember that, at the moment, sterling is just the dirtiest shirt in the laundry basket. The dollar has a semblance of stability because it’s the world’s reserve currency but the Fed isn’t going to cut rates any time soon and, with the warning signs from the US economy flashing red, there’s every chance that the Fed will cut rates back to zero or even relaunch its quantitative easing program weakening the dollar significantly and inevitably rebalancing the dollar’s value to the pound. “

The evidence that Britain’s decision to leave the European Union is beginning to affect investor confidence in its economy is increasing but most commentators agree that it will take some time before the real aftershocks are felt.

JSW Corporation has restated its advice to clients urging them to acquire precious metals like gold and silver in anticipation of a significant increase in stimulus from global central banks.

About Jackson Stewart Wang
JSW CORPORATION is an independent, private wealth management concern based in Shenzhen, China. Combining superior due diligence, market insight, risk management, we provide high level market entry services to private individuals, families and institutions seeking high caliber investment guidance and execution.

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