After a rise that brought sterling to its highest in a year, Deutsche Bank stated on Wednesday that the British pound is no longer appealing in the short term.
Since falling to $1.0327 in September 2018, sterling has climbed 22%, including 4.4% in 2023. At $1.262, it was near a one-year high.
“Having been bullish on the pound since the start of the year, we no longer think the pound presents attractive risk-reward in the short term,” Deutsche analyst Shreyas Gopal wrote on Wednesday.
Deutsche stated, “a lot of the domestic good news for the UK is now in the price” and closed its pound-dollar bet.
It predicted a “dovish surprise” at Thursday’s Bank of England meeting. Deutsche said several BoE dissidents might vote for a rate drop despite traders expecting a 25-basis-point rate hike.
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