Looking for BPS/USD Parity? Buy FXB at $100

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Could the British Pound Sterling (BPS) reach parity with the US Dollar (USD)?  I am willing to put in a trade to pickup FXB at $100 per share. This would likely occur if the pound did indeed strike parity with the dollar.

Joseph Adinolfi agrees. He wrote article published earlier this year he titled,

“British pound could hit history-making dollar parity by end of 2016″

In the article Shaun Osborne, the chief currency strategist at Scotiabank said, “We think investors should be prepared for the risk of [pound] weakness extending quite significantly in the next few months, while uncertainty surrounding how the U.K. moves forward persists. There appears to be little in the way of technical support to stop the currency from returning to those lows in the months ahead, Osborne said. A break below the $1.30 level—nearly where the U.K. currency is presently trading—could send the currency back to these all-time lows in the months ahead.”

According to this graph by Mike Todd, the closest the BPS and USD have ever reached parity was $1.05 in 1985.

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So as of today, I have a gtc order for FXB at $100.

ABOUT FXB

FXB seeks to track the price of the British Pound Sterling, net of trust expenses. The fund seeks to reflect the price of the British Pound Sterling. The sponsor believes that, for many investors, the shares represent a cost-effective investment relative to traditional means of investing in the foreign exchange market.

 

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