Deutsche Bank, one the world's biggest sterling bears, said on Tuesday that UK Prime Minister Theresa May's surprise call for a general election is a "game-changer" for the currency, and that it will raise its forecasts for the pound in the coming days.
May's move should result in a larger and more stable majority in parliament, thereby reducing the likelihood of a so-called 'hard Brexit', the bank's currency analysts said.
"We have been structurally negative on sterling for the last two years but are now changing view. This morning's announcement of a snap general election on June 8 is a game-changer for both the UK's Brexit negotiations and sterling," they said.
May's announcement paves the way for a lengthier negotiating process with the rest of the European Union, which is more in line with the EU approach, they said.
Source: Bloomberg
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