Three of the world’s top currency traders have said the pound woe is just getting started, after the embattled currency plunged to a 31-year low on Wednesday.
Goldman Sachs Group Inc. believes the currency could sink another 7 percent to 11 percent this year as post-Brexit risks continue to weigh on the U.K’s economy.
While Citi group Inc. warned the currency could weaken to $1.20 against the US dollar, citing investors’ expectations that the Bank of England will cut interest rates to contain the economic fallout of the referendum. The Deutsche Bank even forecasts $1.15 by the end of 2016.
To contain further decline, Richard Cochinos, a London based head of Europe Group of 10 currency strategy at Citigroup Inc. said “the currency will need a substantial inflow from investors before the currency stops weakening.” Richard Cochinos was named the world’s biggest foreign exchange trader by Euromoney magazine.
Goldman Sachs forecast $1.20 in the next three months, $1.21 in six months and $1.25 in twelve months.
“The pound has much more to go, “said George Saraveloss, co-head of global foreign exchange research at Deutsche Bank London. “ Our aggressive predictions may still be understating the level of weakness.”
