Forex Flash: UK downgrade may begin new secular trend in GBP - Westpac

GBP/USD looks like it may target levels below 1.50, while EUR/GBP gains momentum to trade as high as 89/90 - unless a 'shocker' in the Italian elections -, as the Sterling looses the ‘safe haven’ status, says Robert Rennie, currency strategist at Westpac. However, he points that at these levels, "Sterling starts to look very cheap to us and our interest in beginning to buy GBP on crosses will rise." Robert does not discard that the GBP may weaken further, but "since it has slid by some 7% versus the US$ so far this year argues against this being the beginning of a new secular trend" Robert says.