LONDON, March 14 Deutsche Bank said on Tuesday
the pound could fall "much lower" versus the dollar, targeting
$1.14 in the second half of this year.
Financial fair value metrics point to a much lower value for
the pound the German lender said. The pound last traded
"The main push back against our continued bearish GBP call
is that Brexit is fully priced and the pound looks cheap against
fair value metrics. We disagree," macro strategist Oliver Harvey
wrote in a note to clients.
Deutsche said little progress in Brexit talks was likely
before a new German government was in place in the late autumn,
leaving an unrealistically short time for Britain to conclude a
new relationship with the European Union.
Until a transitional deal was agreed, the market would
increasingly price a cliff-edge Brexit.
The bank also maintained its recommendation of a short
position on sterling versus the Swiss franc.
(reporting by Ritvik Carvalho, editing by Nigel Stephenson)