PIMCO: Carney will devalue GBP
Pimco Managing Director Mike Amey believes that the incoming Bank of England Governor Mark Carney will take steps to push the sterling down and perhaps to extend quantitative easing programs. Carney will replace Mervyn King as a BoE governor on July 1.
Global currency wars could heat up when Carney joins the British regulator. According to Amey, Carney should aim to depreciate the pound by 10-15% against the US dollar, taking it from around $1.5000 to $1.3700.
"Given the stickiness of UK inflation, and its sensitivity to higher import prices, UK investors should stay alert to the risk of higher-than-expected inflation," he adds.