Pound Poised To Hit $1.29 If U.K. Votes To Brexit: ThinkForex

Look for the pound to drop about 10% if the U.K. votes to leave the European Union in the so-called Brexit referendum next month, said Naeem Aslam, chief market analyst at ThinkForex UK, on Thursday. An "enormous [pound] selloff will take place against a basket of currencies. We're looking at perhaps $1.29 against the dollar," he said. The pound was trading around $1.4471 late Thursday in Europe. On the flip side, no change in U.S. interest rates at the Federal Reserve's June 14-15 meeting and a rejection of Brexit on June 23 sets the pound to propel higher. "The Bank of England could increase the noise in the market...that there could be a rate hike in 2016", Aslam said. As oil is trading above $40 a barrel, "inflation is going to be anchored to the upside and...perhaps the Bank of England cannot sit on their hands and do nothing while inflation is going higher. Overall, "clients are dead-split down the center, 50-50," about what will be the referendum's result, said ThinkForex Chief Executive Nauman Anees. "Just like the markets, they are just very indecisive over where it's going to go. We've seen sterling trading in a range for over six months now."

Copyright © 2016 MarketWatch, Inc.