Expect NZD/GBP to trade above 0.5300 this week - Westpac

Imre Speizer, Senior Market Strategist at Westpac, notes that the GBP was hit hard following the Brexit result, falling against the USD to levels last seen in 1985.

Key Quotes

“The GBP should continue to perform poorly during the weeks ahead, as markets price out BOE tightening and price in some chance of easing this year. We expect NZD/GBP to trade above 0.5300 this week.

3 months: A sustained break above 0.5300 then brings the post-float high of 0.5650 into sight. The main risks for the UK economy stem from the uncertainty which business will now face (e.g. financial flows, trade), dampening enthusiasm for investment. This will cause the BOE to rethink its monetary policy plans and consider easing. Markets certainly think so, already pricing in one full cut by year end.”