While the news on export weakening this morning is pushing the pound downward, Goldman’s Erik F. Nielsen is arguing that the UK is in much better shape for a rebound than continental Europe.
Nielsen says that the pound is likely to rise to $1.73 in half a years time, due to improving economic conditions for the country, while the Euro could be on parity with the dollar, according to Bloomberg.
The pound is certain to experience more short term volatility due to the uncertainty of the UK elections. A low exchange rate now will help the UK’s economic results in the coming months.
But the E.U., particularly Euro zone members, is one of the UK’s biggest trading partners. Low demand there could slow the UK’s real export recovery, which may also impact the pound.