The UK currency podremontirovat rebound after the country's prime minister Tereza Mey surprised the markets decision to hold early elections. On Tuesday, the value of the pound against the dollar rose to a maximum in the last six and a half months.
Despite the fact that the currency has strengthened due to growing optimism about the fact that the current Prime Minister will win a stunning victory, some analysts warned that the pound rally will not last long.
"The market response is very rational, given this message. I think the Conservatives will return to Parliament with a majority of seats ", - says the managing director of PIMCO Mayk Emi.
Amazing market reaction
Some analysts have said that they were quite surprised by the market reaction to the statement of May on Tuesday. Callum Pickering, senior economist at Berenberg in the UK, told CNBC via e-mail that he was surprised by the positive reaction of the market.
"No major changes in my outlook on the pound has not occurred. Brexit, pricing in the markets, the Fed raising rates and the likelihood of disagreements in the negotiations between the EU and Britain suggest that the pound sterling will fall by the end of the year. "
As you know, it fell by more than 15% from the date of the referendum in June last year the British currency's value. On Tuesday, the pound showed almost 4 percent rebound, starting with growth of 1.25 and ended the trading day at about 1.28 marks.
How long will the rally?
Analysts warn that this rally will not last long. Vasileios Gkionakis, head of global strategy at Unicredit Bank, calls are several reasons why the rally of the pound will be short-lived:
"Firstly, the UK economic indicators stability largely reflects the acceleration of global growth, and we expect more signs of divergence in the upcoming quarters as high inflation undermines the real incomes and confidence of the British. "
Second, a single British government's position is unlikely to improve England's negotiating position in the EU.
Daily Forex forecasts will become your encouragement and support in the market.
Based on materials WELTRADE
