This has been a tough week to hold the British pound. Talk of more monetary easing ahead and weak economic reports have been weighing on the currency, and a Friday credit-rating cut sent it still lower.
But if you haven't yet been selling the pound, is it too late to start?
Not at all, says Kathy Lien, managing director at BK Asset Management.
U.S. markets were the only ones open when the rating cut was announced, she says, and "when Asia comes online, when Europe comes online on sunday, what we are probably going to see is an exacerbation of this move."
On top of the reaction to rating cut, and dismal U.K. economic reports, Lien is concerned about the internal dynamics at the Bank of England. Governor Mervyn King last week took the rare step of siding with the minority and arguing for more monetary easing, and Lien thinks the BOE could ultimately follow that plan. "We are going to see a deep selloff in the pound-dollar," she told CNBC's Melissa Lee.
That said, at current levels, Lien doesn't like the risk-reward ratio on a short pound trade. She wants to wait for an uptick to 1.5400 and then sell the pound against the dollar, setting a stop at 1.5600 and a target of 1.5000.
