Sterling’s weakness ‘could persuade investors to diversify’

<p>Investors could look elsewhere because of the pound’s weakness.</p>

Investors might be tempted to move their assets into different currencies if the pound gets any weaker, it has been claimed.

Writing for Investment Times, Peter Hargreaves of Hargreaves Lansdown stated sterling has "markedly" weakened over the course of the last few months.

He explained he believes this trend is set to continue for the rest of the year, but pointed out this does not mean investors should rush to move their assets into other currencies.

"It has always been accepted wisdom to have most of your assets denominated in the same currency as your liabilities," said the specialist.

As the UK's debt has a longer maturity and is financed internally, Mr Hargreaves noted how this can be a positive sign for sterling in the near future compared to other currencies.

Jeremy Stretch, head of currency strategy at CIBC World Markets, recently told Reuters how "encouraging" industrial data for the UK had helped to strengthen sterling's position in the market.

He also said investors ought not to worry about the prospect of a triple-dip recession.

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