Thursday, July 7, 2016
rebound in GBP/USD
Securities advises using the latest rebound in GBP/USD from this week's 31-year low just below $1.28 to initiate or add to short positions. GBP/USD trades at $1.2946. As the implications of the U.K. vote to leave the EU "sink in," TD sees "protracted downside risks for sterling". GBP/USD is expected to drop to $1.20 by the end of the year. However, TD notes: "The risks to our forecast are currently skewed to a further--and faster--decline." The pound faces "substantial downside pressure" as global investros allocate capital away from the U.K., it says, adding the U.K.'s large current account deficit is likely to come to the fore.