Research Team at Westpac, suggests that the GBP’s fall is a necessary part of the overall mix of monetary conditions easing.
“Concerns over inflationary impacts on household confidence together with broader uncertainty over business investment intensions as “hard” or “soft” Brexit negotiations will weigh on economic prospects and so on GBP.
Technical: Daily momentum may appear supportive, but the broader bias is for GBP to retest recent lows. Though 1.2320-25 has capped initial rebounds, risk of a squeeze to 1.2450-60 persists. Even so, the 1.2320-1.2460 area should allow for rebuilding GBP shorts for retests of 1.1840 (flash crash low).”