Pound ‘Most at Risk’ as Currency Loses Yield Advantage, RBS Says

By Justin Carrigan

Aug. 24 (Bloomberg) -- The pound is the most likely to fall among the major currencies in weeks ahead as yields on gilts decline, according to Royal Bank of Scotland Group Plc.

“Of the major currencies, the pound looks most at risk of falling behind,” Greg Gibbs, a foreign-exchange strategist at RBS in Sydney, wrote in a research report today. “Over the last couple of weeks it has lost considerable yield advantage. On two- year paper, it is now the clear second-lowest yielding behind Japan. The euro-pound yield advantage has risen from flat at the end of July to plus 48 basis points. As yet the currency reaction has been minimal.”

To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net