Many currency market observers are forecasting more pain for sterling in the weeks ahead, a situation that could be worsened if the Bank of England (BoE) moves forward with lowering interest rates. That scenario could come to pass.
Related: 10 ETFs Hit the Hardest in ‘Brexit’ Fallout
The Bank of England could cut interest rates to bolster the British economy, potentially supporting currency-hedged exchange traded fund strategies as a United Kingdom play.
“As we mentioned in our earlier post, the large A-B-C structure eventually should take the Pound to lower lows beneath the present area, but it may take a year or longer to get there. In the meantime, there should be an opportunity for an upward or sideways correction that could last several months – perhaps even a year,” adds See It Market.
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CurrencyShares British Pound Sterling Trust
