Central banks are abandoning the euro in favour of the UK pound
The Financial Times has reported concerns over European weak growth, political instability, and the ECB’s negative interest rate policy has led central banks to reduce their exposure to the euro.
The survey conducted by HSBC, shows that global Bankers see the UK as a stronger prospect for their reserve investments than the Eurozone. They favor the UK currency as a stable, long-term alternative, in spite of the UKs recent triggering of Article 50; effectively cutting ties with the EU.
The sterling has actually been strengthening compared to the euro since Article 50 was triggered last Wednesday, which has bizarrely not affected the popularity of the sterling as an investment currency. 71% of respondents found the appeal of the pound was not dampened in the long term. Many bankers voiced optimism that Brexit could provide an opportunity to further diversify their portfolios in future.
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