Its time to start buying the Pound
Despite Mark Carney's best efforts to devalue the pound each time he opens his mouth, I think the outlook for the Pound is becoming more positive. There are two factors underpinning this:
1. The Bank of England has a dual mandate - to stabilise prices (keep inflation under control) and promote strong growth and employment. Inflation is at 2.9% while Unemployment is at 4.6% and GDP Growth is at 2%. The latter two of those are not bad compared to other developing countries. A rate rise is not far away now or at least, there is a stronger and stronger case for one.
2. The pound is fundamentally very undervalued compared to its PPP of 1.42.
Technically, we're at the bottom of a rising channel formed after Brexit.
1. The Bank of England has a dual mandate - to stabilise prices (keep inflation under control) and promote strong growth and employment. Inflation is at 2.9% while Unemployment is at 4.6% and GDP Growth is at 2%. The latter two of those are not bad compared to other developing countries. A rate rise is not far away now or at least, there is a stronger and stronger case for one.
2. The pound is fundamentally very undervalued compared to its PPP of 1.42.
Technically, we're at the bottom of a rising channel formed after Brexit.