Deutsche Bank Forecast Pound Weakness on Brexit

27 March 2017 by News Desk   |   SHARE  

Deutsche Bank, Germany’s largest lender, is continuing with its current course of building a new HQ in London, despite believing sterling will sink against a host of other majors. The banking giant stated that it believes GBP will sink to parity with both the US dollar and the euro – a fall of around 15%. A move like this would drag it down against other currencies like the Australian and New Zealand dollars too.

The bank wrote: ‘We do not see sterling (currently) fully pricing a hard Brexit outcome. Combined with limited adjustments in the UK’s current account deficit and slowing growth, we see further downside and forecast [US]$1.06 in by year-end.’

Despite the pound clawing back some losses from the US dollar in recent weeks, it’s still trending around 15% lower than it was before the EU referendum. Thursday saw GBP/USD breach a one-month high at 1.2528 following better-than-expected UK retail sales stats. As Brexit concerns take over the market, strong domestic data and rising commodity prices could help to buoy the Australian dollar against sterling.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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