GBP/USD faces upside risks near term – Westpac

GBP/USD is seen picking up further upside momentum given a ‘Bremain’ scenario at the referendum tomorrow, suggested strategists at Westpac.

Key Quotes

“GBP has risen 2.8%+ on a TWI basis from last week’s lows as bookmaker odds for the “remain” camp shorten once again and polls begin shifting back toward the remain camp”.

“We assume remaining undecided voters break toward the status quo, as they have been wont to do in various UK votes over the years. After the Sep 2014 Scottish vote and May 2015 general election GBP not only rose back to the highs that prevailed in the 10-20 days ahead of these votes but slightly exceeded them”.

“Similar dynamics should see GBP TWI a further +1.5% higher than current levels.  GBP/USD has almost already returned back to its late May levels, but EUR/GBP though has another 1.7% downside while GBP vs the likes of AUD, CAD and NZD could rally a good 3%+ from current levels”.