Currency Forecasters and Football Pundits: Why You Should Never Rely on Forecasts Alone

At the start of the Premiership Football season, Leicester City were 5000-1 to win the League.

With just 13 games left of the season, they now stand 5 points clear at the top of the table and are favourites, having despatched title rivals Manchester City 3-1 in ruthless fashion at the weekend.

It’s been a remarkable story thus far, as the Leicester team that took on Manchester City was assembled for less than £25 million, compared to ‘City’s’ superstars which cost over £250 million!

Leicester’s remarkable form this season has had many pundits scratching their heads and it reminds us of how often in currency markets Economists (currency market’s version of football pundits) get it wrong!

Recall that throughout 2015, the consensus view of 79 financial institutions polled by Bloomberg had GBPEUR averaging 1.4500 in 2016, yet here we are and GBPEUR is languishing in the 1.29s, having printed its lowest level in over a year yesterday!

You should never rely on FX forecasts.

Whilst the information is useful, you should always be prepared for the unexpected and Investec have the tools to help you with this.