UBS: The British Pound Is At Risk Of ‘Large-Scale Devaluation’

Forex Flash: The British pound is the next big devaluation story – UBS (Nasdaq, Feb 17, 2013):

Sterling is likely to be the next major currency that depreciates strongly, says Mansoor Mohi-uddin, Head of Foreign Exchange Strategy at UBS Macro Research.

“As central banks tolerate higher levels of inflation, the pound is set to weaken further across the board particularly against our favourite G4 currency, the US dollar” Mr. Mohi-uddin adds.

He concludes: “The GBP seems clearly at risk of following the yen and suffering the next large scale devaluation. As a result, we issued a recommendation that clients buy a six-month sterling put/US dollar call option with a strike of 1.4800.”

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