Bloomberg
Published Aug 29, 2019 07:44AM ET
Updated Aug 29, 2019 08:13AM ET
There’s a Silver Lining to Johnson Brexit Move for Pound Pundits
(Bloomberg) -- U.K. Prime Minister Boris Johnson’s move to suspend Parliament increased the risk of a no-deal Brexit and sent the pound plunging, but strategists see a silver lining for sterling.
The closure of the debating chamber on Sept. 12 could focus the minds of both U.K. lawmakers and the European Union on stopping a crash exit on Oct. 31., according to Credit Agricole (PA:CAGR) SA and Deutsche Bank (DE:DBKGn) SA. That could provide support in the near term to sterling for MUFG and ING Groep (AS:INGA) NV.
“The latest developments may also increase pressure on officials to find alternative solutions to the Irish backstop issue,” said Manuel Oliveri, a strategist at Credit Agricole. “Speculative investors have been retaining excessive shorts and such conditions may still mean that better levels could be reached in coming weeks.”
Sterling held its ground above $1.22 Thursday, after falling 0.5% this week. Morgan Stanley (NYSE:MS) sees a strategic buying opportunity if sterling slides further to $1.15, an almost 6% drop. Here are analyst comments on the currency’s outlook:
Deutsche Bank (Sees No-Confidence Vote)
Written By: Bloomberg
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