GBP/USD: The pair is heading towards 1.22 within 3 months (Credit Suisse)

Credit Suisse estimates that the Brexit effect is still not over and should push the GBP/USD down to 1.22 within the next 3 months.

"As a result of the UK decision resulting from the 23 June referendum, our economists have significantly lowered their forecasts for the UK and European economies. Within this same context, we are revising our forecasts.

As we were wrong regarding the referendum result, we are lowering our 3-month forecast of the GBP/USD to 1.22 compared with 1.58 previously.

We believe that the fiscal deficit and the UK's current account, combined with a currency that is not particularly cheap, leave room for further GBP weakness. If the BoE responds to a hurting Britain with a rate cut and a revival of QE as we expect, the GBP will have new reasons to fall further."