HSBC's Bunning: Politics Is Now the Key Driver of FX

The video discusses the bearish outlook on the British pound due to ongoing political and structural challenges in the UK, particularly Brexit. It highlights a regression chart showing the pound's decline and HSBC's prediction of further weakening. The discussion shifts to a bullish view on the US dollar, especially against emerging markets, driven by political factors post-Trump's election. The video emphasizes the role of politics in driving foreign exchange markets, noting the lack of strong political convictions for currencies like the euro and yen. It concludes with concerns about the impact of US policies on global trade, particularly for currencies like the Aussie and Kiwi.

What is the main reason for the bearish outlook on the British pound according to the speaker?

• Improving political conditions in the UK

• Structural and political challenges related to Brexit

• Decreasing current account deficit

• Strong economic growth in the UK

What does the red line in the chart represent?

• A regression from a high of 160 pounds

• The future prediction of the pound's value

• The advent of the HSBC outlier call

• The current exchange rate of the pound

How has the speaker's view on the dollar changed post-Trump election?

• More bearish, especially against emerging markets

• More bullish, especially against emerging markets

• No change in the view

• More bearish, especially against G10 currencies

According to the speaker, what is now the key driver of foreign exchange markets?

• Political factors

• Interest rates

• Trade balances

• Economic arguments

What potential risk does the speaker highlight regarding Trump's policies?

• Decreased infrastructure spending

• Negatives around global trade

• Higher taxes

• Increased global trade