Between today’s currencies, it often seems a contest of the least bad. Given potential interest-rate trajectories, the ECB is unlikely to raise rates in the foreseeable future.
With UK gilts yielding 1.7 per cent compared to just 0.66 per cent for French bonds, it is clear how sterling might attract international flows hunting for yield.
This notwithstanding, currencies are notoriously difficult to call. We have a 50/50 chance of getting it right – at best.
Olly Russ is manager of the Argonaut European Income fund