“The U.K. currency has weakened against both the dollar and euro in the past week, as Bank of England Governor Mark Carney emphasized that eventual interest-rate increases will be gradual, while data confirmed the pace of economic growth in the nation slowed in the third quarter. In the next week, currency traders may be more likely to take their cues from elsewhere, as the ECB meets amid speculation it will boost stimulus,” reports Eshe Nelson for Bloomberg.
With conservatives strengthening their position in British parliament, winning 323 seats, some market observers believe this now is the time to consider U.K. equities and the related ETFs. On valuation, U.K. stocks are pricier than some major Eurozone markets, but attractively valued relative to other large developed markets, including the U.S.
“The pound has dropped more than 4 percent against the dollar since the middle of 2015 amid concern that U.K. economic growth is slowing and will weigh on the prospects for higher interest rates. Forward contracts based on the sterling overnight index average, or Sonia, aren’t fully pricing in a BOE interest-rate increase until after January 2017,” according to Bloomberg.
CurrencyShares British Pound Sterling Trust
