Thursday, March 2, 2017 1:35 PM EDT
The British pound has been surrendering to the might of the US dollar, and also suffering the woes of Brexit. There are further reasons to sell sterling.
Here is their view, courtesy of eFXnews:
The GBP has been under pressure of late, partly on the back of the UK’s unelected upper house voting by majority in favour of an amendment that protects the right of EU nationals to remain in the UK after leaving the European Union. The amended bill will be debated on March 13/15, what would still leave enough time in order to trigger Article 50 ahead of the self-imposed 31st March deadline.
We stay of the view that the GBP should be sold on rallies. This is not only due to Brexit related uncertainty which is likely to rise even further as soon as the exit process begins but also as the BoE is nowhere close to consider a less dovish policy stance.
It must be noted that inflation expectations as measured by 5Y breakeven rates have been consistently falling of late, irrespective of the capped currency.
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