Dai-ichi Securities: Turbulence Forecast For GBP.
“Dai-ichi Securities” – The British Pound is set for further turbulence on foreign exchange markets.
Dai-ichi Securities analysts are expecting the foreign exchange markets to continue to lay siege to the British pound in the coming days as foreign investors in gilts head for the exits in the aftermath of the Bank of England’s decision to pause its program of quantitative easing.
In an analysts’ note to clients, Dai-ichi Securities reportedly advised clients that they should convert sterling-denominated assets into alternative currencies but continue to avoid the US dollar which they believe is due for a protracted sell-off as deleveraging slows on the back of US government bailouts and guarantees.
Dai-ichi Securities are reportedly suggesting currencies like the Swiss franc, the Japanese yen or the Canadian dollar as viable alternatives but also seem to be warning that precious metals, including gold and silver, will appreciate against all paper-based currencies as world governments continue to utilize monetary expansion and fiscal stimulus to kick start their economies in the face of the global slowdown.
Dai-ichi Securities are thought to expect sterling to slip to as low as $1.40 in the coming months, far from its highs of $2.11 over 2 years ago and have cited gold’s current £700+ per ounce price as proof of its value protection against government profligacy.