LONDON (Reuters) – Deutsche Bank said investors should sell the pound on a broad trade-weighted basis, in a Friday note, as Britain’s current account deficit is no longer improving, and the currency is vulnerable to the recent increase in volatility.
The pound has lost nearly 2% this week against a strong dollar to a 14-month low of $1.2239
It has also has also lost ground on the euro and other majors, a reversal after sterling was the second best performing major currency last year behind the dollar.
“With the trade-weighted sterling index still sitting just over 2% off its post-Brexit highs, we think there’s further to go in the recent pound weakness,” Deutsche said.
“We like selling GBP against a basket of other major currencies,” they said, mentioning the euro, dollar, Swiss franc and Japanese yen.
Deutsche had been bullish on the pound until mid December.
(Reporting by Alun John; Editing by Amanda Cooper)
