GBP/USD: Calls for parity may begin to emerge – TDS

The forecast of 1.11 for cable now looks to be in need of re-examination, in the opinion of economists at TD Securities who believe that markets need to consider how non-trivial a move to parity for GBP/USD may be.

Higher new range for EUR/GBP within 0.90-0.92

“With the UK proposing to blow up its budget deficit, a weakening balance of payments backdrop should keep downside pressure on the currency.”

“Our year-end forecast of 1.11 for cable is now at risk of looking too high and we will not be surprised if calls for parity begin to emerge.”

“EUR looks better situated, for now, versus GBP. The move above 0.88 sets the stage for a higher new range bound by 0.90-0.92.”