Monetary policy expectations remain the biggest short-term driver of currency trends. There is a deep well of negative sentiment surrounding the UK and the Pound, that has been in place since the financial crisis and even more so since the Brexit referendum. But long-term concerns about growth can’t drive Sterling lower and lower in real terms – they merely ensure that it remains at a lower level than it was before.

The rate differential required to get Sterling above USD 1.30 today, is far wider than it was a few years ago. That won’t prevent Sterling from being resilient for now, as long as monetary policy tightening remains on the table, but once rates have peaked, in the US, UK, Eurozone and elsewhere, Sterling will look pretty vulnerable.