Asset Allocation 

Cheap – for a reason

Chris Dillow

Chris Dillow
Cheap – for a reason

Despite its recent rise, the important fact about sterling is that it is still low. If we adjust for differences in consumer price levels to get a measure of the real exchange rate the pound is 17 per cent below its post-1999 average against the US dollar and only slightly above the post-1985 low it hit soon after the EU referendum. And even against the euro – which has been weakened by the region’s negative interest rates and feeble economy – sterling is 4 per cent below its post-1999 average.

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