Leaded the growing likelihood of an exit of Britain from the EU without the agreement (the famous Hard Brexit), the Book tumbles down since Monday, with a low of 1.2382 on the pair GBP/USD this morning.
And if we are to believe a analysis note published by Morgan Stanley (NYSE:MS) on Wednesday, the fall could still greatly increase for the Pound against the Dollar, the bank providing for parity between the two currencies in the event of a Hard Brexit, a probability that increases note-t-it.
Remember that the Pound has reached its lowest level in two years below 1.24 $ on Wednesday after the two candidates for the post of prime minister have hardened their rhetoric about the Brexit.
“The pound sterling has been subject to intense selling pressure since the Prime minister May be removed from his position as leader of his party, leaving the markets in the face of a growing concern that the Uk could be headed for a Hard Brexit,” said Morgan Stanley.
“If this scenario materializes, the pair GBP/USD may range between $ 1.00 and $ 1.10 per” she says.
It is interesting to recall that the Bank of England had already declared in November that the Pound may fall below parity with the dollar in the context of a scenario of exit from the EU without agreement, an analysis which had been considered to be too negative at the time.
A meeting of the negotiators of the Brexit last week has been one of the most difficult of the past three years, according to the european officials, who are preparing to have the discussions become more hostile under the next british government.