In the fourth quarter of 2019, sterling was one of the best performing currencies among advanced and emerging market economies. When UK Prime Minister Boris Johnson took office, the overwhelming consensus regarding sterling was that it was set to depreciate significantly. Many central banks issued warnings about the possibility and likelihood of EUR/GBP moving to parity. At the time, I believed that most of these forecasts were not credible, because GBP had already depreciated by around 20 per cent on a trade-weighted basis since the June 2016 Brexit referendum. In a sense, Brexit had already been priced in by the…

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