Pound lurks in the shadow of 2008

Pound this year has sharply deteriorated against its major trading counterparts. Against Dollar, it is down about 3.2%, against Euro 3.7%, against Yen 4.5% and 1.8% against Franc as of today and that is not the low of Pound this year.

Pound has been battered heavily since late last year as focus turned into two major prevailing fundamentals- fading expectations of rate hike from Bank of England (BOE) and the possibility of Britain's exit from European Union.

Bank of England (BOE) is now not expected to move until very late this year and more likely to be next year as inflation remains at zero bound and interest rate already at 0.5%. On the other hand, most of the polls are pointing that the referendum would either be a close call or there is slight majority in favor of an exit.

None of them good news for pound.

Pound in response has fallen past 5 year low and hovering around lows made during 2008/09 crisis era and there are high possibilities that it might close lower than 2008/09 on monthly basis in January. If Pound do drop below 1.4 area and past 2008/09 low, then we are into an uncharted territory, full of uncertainty.

Pound is currently trading at 1.428 against Dollar.