The pound has clearly been the under-performer this week and in the G10 space is the worst performing currency, notes BTMU.
"The resignation of Ian Duncan Smith late on Friday has fuelled concerns over a more damaging division within government over ‘Brexit’...The terrible scenes that unfolded in Brussels yesterday has also added to negative pound sentiment," BTMU adds.
"The poor performance of the pound this week does highlight the fact that the pound is likely to remain vulnerable to a large number of unfolding events that merely highlights the uncertainty related to the referendum.
With a large current account deficit to be financed we maintain that further declines back below the 1.4000 level versus the dollar are very likely," BTMU argues.
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