News in brief: weak pound, Brexit, EU, Burma, Business is Great

Pound weak against the dollar
Pound weak against the dollar

Weak pound divides experts on Brexit

Following the news that the pound has just fallen to a new seven-year low, hitting $1.3926 against the US dollar due to Brexit fears, experts around the world have been clamouring to give their two cents.

Founder and CEO of RationalFX and Xendpay Rajesh Agrawal, who is also business advisor to Sadiq Khan MP, the Labour Party’s candidate for the upcoming London Mayoral Election, said: “The run on the pound over the last few days is just a small taste of what we should expect if Britain actually votes to leave. Even the strongest advocates for Brexit in the City admit that leaving the EU is risky in the short to medium term, and at best a gamble in the long run.”

Agrawal explained that polling data on voter intentions will be a particularly important indicator to traders and, whilst we have so many undecided voters, volatility can be expected to remain.

However, emerging markets wealth management firm Sun Global Investments CEO Mihir Kapadia claims that the ‘No’ campaign has seen its day already, as UK voters will now see through the scaremongering and political tactics.

Kapadia said: “The GBP continues its downward spiral recording a seven year-low of below $1.40 amid ongoing uncertainty surrounding Brexit. However, the recent economic fluctuations we have seen after Boris Johnson’s decision to back the ‘No’ campaign will no doubt subside, and the Pound could see a further fall to around the $1.35 level.”

Sun Global Investments CIO Sanjiv Shah agrees, saying: “Boris Johnson’s announcement that he is going to campaign on behalf of the Brexit campaign has triggered a 1.2% drop in the value of the Pound against the Euro, prompting concerns that it will continue to weaken as doubt over the outcome of the referendum increases.

“We believe that, as the debate unfolds, there could a material increase in support for Brexit, which will add further pressure to the Pound, stock and gilt prices.”

UK Minister launches Business is Great campaign in Burma

Transport Minister Lord Ahmad has visited Burma to discuss transport infrastructure, announce UK Export Finance cover of US$300 million and launch Business is Great campaign in the region.

Lord Ahmad said: “As new opportunities emerge, I am thrilled to be able to announce that UK Export Finance (UKEF) has increased its cover capacity to US$300 million to help UK companies export to Burma. This is important both for British companies and for Burma’s economic development.”

UKEF, the UK’s export credit agency, will make the cover available to UK exporters seeking to compete for business in Burma as the country re-engages with the international community and accelerates its infrastructure development. UKEF will also be able to offer support directly to the Burmese Government in the form of direct lending linked to deals where there is notable UK content.

UKEF is working closely with UK Trade & Investment as well as the Government of Burma to identify export opportunities, particularly related to infrastructure. A number of British companies have already approached UKEF about potential projects in Burma.