Societie Generale Research discusses its latest USD and GBP outlook over the coming months.
"The picture is becoming clearer as key pieces fall into place, but while a dollar reversal is approaching, there is still uncertainty (in Europe) and danger (in emerging markets). We yearn to write ‘just sell the dollar', but we're not virologists and it's still too soon to go short across the board, even if we expect the dollar to be weaker against the euro and most of the G10 currencies in a year's time," SocGen notes.
"Sterling is particularly vulnerable to a poor global backdrop. Brexit was never going to be easy for the economy, and with the risk of no trade deal or only a de minimis one being agreed with the EU before the end of the year, the UK has more economic downside than most and sterling could be vulnerable. A new cycle low in GBP/USD under 1.15, a move above EUR/GBP 0.95 and a new all-time GBP/JPY low below 110 would be likely," SocGen adds.