Brexit May Have Killed the Strongest G-10 Currency Seasonality
- Pound rose every April for 13 years, before faltering in 2018
- Strategists say it’s risky to bet on pound strength this year
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The pound may miss out again on the once-solid seasonality of an April rally fueled by dividend flows, and Brexit is to blame.
Sterling gained versus the dollar every April for more than a decade, before breaking the trend last year on Brexit woes and dollar strength. The pattern, previously deemed the strongest seasonal trend among Group-of-10 currencies by Bank of America Merrill Lynch, won’t be enough to outweigh Brexit risks this year, according to strategists at Mizuho Bank Ltd. and Royal Bank of Canada.