Over the past three years, politics and the Brexit debate has influenced movements in Sterling. Sterling is the fourth most traded currency and the third most widely held reserve currency in the world. However, anticipating currency movements is not straightforward, and traders’ speculative outlooks on their own can shift rates above or below what the market suggests.
Sterling's weakness over the summer has simply been down to the most feared outcome outweighing the preferred outcome. From market's movements, a No-deal Brexit is the most-feared outcome and therefore a threat to the value of Sterling, but falls in the value of Sterling are not necessarily all bad.
The investment market has been subdued this year, but overseas investors with longer-term horizons are willing to take on the ‘Brexit premium’ and commit to the UK market, as assets now look cheaper on paper. There is a risk of further devaluation, and rent is still paid in Sterling, but there are other factors to consider. The occupational market remains broadly resilient, and attractive pricing compared to other asset classes and markets continues.