Stack of pound coins (Linda Bestwick/Shutterstock)
often criticized for its volatile and unpredictable nature – now analysts are saying that, and more, about the pound sterling.
In a shock-inducing note to clients on Tuesday, currency analysts at Bank of America (BoA) said sterling had devolved into an emerging market currency in all but name during the four years since the U.K. voted to leave the European Union.
Sterling’s movements in the past four years has been “neurotic at best, unfathomable at worst,” said lead analyst Kamal Sharma, a notable GBP bear, in a by the Financial Times.
Sterling’s spreads and implied volatility – the future range investors expect GBP to move in – remain far wider than other major world currencies, such as the U.S. dollar, euro or Japanese yen, and resemble something closer to the Mexican peso.
Uncertainty surrounding a future trade deal with the EU, as well as the possibility of negative interests, have also harmed investor sentiment, BoA said.