GBP/USD extends post-Brexit rebound to 1.40 handle

The recovery in the GBP/USD pair gained traction over the last hour, now pushing the major further north towards 1.40 handle.

The UK’s PM Cameron’s comments that UK economy remains fundamentally strong, coupled with BOE Governor Carney’s remarks that the central bank is ready to take measures as required, offered some respite to the GBP bulls.

However, the recovery looks fragile as markets continue to weigh the impact of Brexit on the UK’s economy, with most analysts predicted a UK recession in the making.

Analysts at TD Securities noted, "We see the odds of a UK recession within the next 12 months as now 60%. We pencil in year-end targets for GBPUSD of 1.20 and 0.50% lows in 10y gilts, and shift the next Fed hike to June 2017, with a 30% chance of a rate cut but only if downside risks materialize, with these forecasts remaining fluid." 

The major was slammed to the lowest levels since 1985 at 1.3218 levels earlier today, after the Britons voted for a Brexit at the historical EU referendum held Thursday.