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L.M. Montgomery said “I wonder what it would be like to live in a world where it was always June”. Cricket, sunshine, gin & tonics and a general malaise characterised by some of the sunburn seen in the World First office over the past few weeks would probably be my ideal; a strong pound would be the cherry on that seasonal ice cream.

A lot has been made over a possible ‘W’ shaped recovery of the global economy over the coming few months. Have we seen green shoots or are they yellow weeds?

I had the pleasure of meeting with some very clever people yesterday; market sages who have been involved in prognostication and prediction of asset classes for longer than I have been around. Talk moved from equities to commodities to bonds to finally the FX markets. The overriding belief is that the dollar is oversold in the short term and the summer months will be defined by dollar strength that will drive cable lower. Rates bandied round yesterday included a cable rate of 1.47 and a EUR/USD that could top out at 1.43 before whipsawing lower over the summer months. The prognosis for GBP/EUR is equally poor with falls to 1.10 - 1.12 predicted.

Our long term view for sterling still holds true; we think that the prospects for sterling are good and that the economic data that has supported sterling’s rally will not long desert the pound but for the meantime a sleepy summer could prove to be nightmarish for GBP.