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GBP/USD on its way to 1.6000? – Westpac

FXStreet (Edinburgh) - Robert Rennie, Analyst at Westpac, notes the likeliness of the sterling to test the 1.6000 level vs. the greenback in the near term.

Key Quotes

“While there are significant unknowns about the event itself given the structure of the vote (16 year olds but no expats?), potential turnout and the very simple yes/ no question, the recent trend in the polls confirms the outcome will be extremely close”.

“However, the weekend poll clearly demonstrates a clear narrowing in views and this now means that this is a critical driver for the £ and financial markets will follow each and every twist closely”.

“Given the poll takes place in the same week as the first of the TLTROs and the September FoMC where the Fed is expected to debate 'new language on interest rates' we would expect to see further weakness in the £ and € and strength in the US$”.

“Even if, as I hope and expect, a no vote is the final outcome, it's likely that we will see further weakness ahead for the £. With the 1.6280 level broken this morning, the potential for a push down to 1.60 looks possible in the near term”.

Session Recap: GBP extends selloff on Scottish poll

A quiet uneventful session in the FX market, with majors consolidating in tight ranges, with the exception of the pound, which has continued to suffer on the back of Scottish independence fears.
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