SEB has been named the best bank globally when it comes to forecasting British pound against the American dollar, with less than 2 per cent margin of error. Chief FX Strategist Carl Hammer says the ranking reflects the effort put into examining the UK economic situation.
The ranking, from Bloomberg Markets, a magazine within the Bloomberg Group, is based on the bank's forecasts over six quarters, from the start of 2009 through to June this year. About 50 international banks were examined during the survey.
SEB was shown to have a 1.93 per cent margin of error, about twice as accurate as next-placed Wells Fargo on 3.97 per cent.
Carl Hammer, chief FX strategist, says the result follows a fourth place last year in connection to the pound against the euro (ranking based on forecasts made between January 2008 and June 2009).
"What's really pleasing about this ranking is that is shows our consistency as the ranking is based on a number of regular forecast updates. When you look at the total space of international banks, we have managed to stay on top of Sterling forecasts for a relatively long period of time.”
Hammer says the foreign exchange unit works with fundamental, quantitive and technical analysis. Following the UK central bank's decisions and actions has probably been a crucial factor in the strong pound analysis.
The result is particularly pleasing considering the turbulence in foreign-exchange markets since the financial crisis. Of the seven currency pairs examined, SEB had the lowest margin of error of all forecasters with the exception of forecasts for USD/CNY (but the Chinese currency is partly fixed to the American dollar). The best overall forecaster (eight currency pairs) had margins of error of 4.10 per cent to 5.89 per cent.