HEDGE YOUR BETS

摘要

The UK economy and its currency were just beginning to recover a year ago, but sterling strength was but a distant dream. Bank of England governor Mark Carney had just stepped into the role in July 2013 and faced a long road towards economic recovery. The UK economy's eventual recovery arrived swifter than expected, charming currency markets into pricing sterling accordingly. This saw sterling remaining strong against other major currencies, including a failing euro and a flailing US dollar. Sterling's dominance over other currencies this year - with the sterling index rising to highs in April not seen since 2008 - has heralded a rosy outlook for the UK economy. This has not been solely due to stellar improvement in the UK economy; comparatively poorer results from major economies like that of the eurozone and US have also contributed to sterling strength. Therefore, we should heed the caveat that a strengthening UK economy does not necessarily equate to a strong currency.