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Forex Flash: Further GBP/USD weakness to 1.45/1.50 range expected - RBS

The GBP/USD extended its decline below the 1.5000 mark to reach fresh lowest level since June 2010 at 1.4865. Currently the pair is trying to recover the 1.4900 region and it is trading at 1.4910 but according to UBS's strategist Paul Robson, "further GBP/USD weakness is expected".

The RBS is retaining its "negative GBP bias and expect GBP/USD to move into a 1.45-1.50 trading range, with risks heavily skewed to the downside." Robson points that current week UK trade and industrial production "should reinforce the idea that the UK economy isn't rebalancing and that GBP's equilibrium exchange rate is somewhat below current levels."

Robson states that "while GBP fundamentals look set to remain weak," the bank expects "an increasing kicker from the USD."

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The US dollar trades little changed versus major competitors on Monday as market takes a breather to assess the NFP figures published on Friday and Draghi's speech that followed the ECB meeting. However, commodity currencies are outperforming, accomplishing solid gains versus the dollar despite subdued Chinese data.
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