ForexSQ forex trading blog says Goldman Sachs and Bank of America Merrill Lynch pointed to sterling stabilizing around $1.30 or even slightly higher over the next few months, although they saw risks of more weakness.

“We could see sterling over a 6 month period depreciating 10-11 percent (but) most likely markets are overshooting,” Goldman strategist Silvia Ardagna told a call with investors.

The options market that big investment funds use to hedge against or bet speculatively on shifts in the pound still provides for swings of 20 percent in the dollar exchange rate over the next month from here.

“Weaker sterling is a desirable stabilising mechanism. Versus the dollar we see scope for it to fall further to.............

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