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Investors believe the pound is cheap and can jump to $ 1.45
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Loading...The pound is cheap and could jump to $ 1.45 as Brexit's uncertainty begins to unfold, said investors from Merian Global Investors Ltd.
They have a long positions on sterling, relying on the fact that the economy will improve as soon as the long-standing chaos of Britain's separation from the European Union is over.
"The sterling is cheap, especially if we get some clarity about Brexit," said Haw Davis, a fixed income investment director, in a interview in Singapore. "We are long and trade the range. For clarity, the pound can reach $ 1.40 or $ 1.45. "
Merian's upside position on the lira puts it at odds against companies like Nordea Bank AB, who recommended selling the currency, saying that every optimism around Brexit was excessive.
The pound rose against all of its G-10 colleagues, gaining 4% against the dollar and reaching a nine-month high of $ 1.3381 last week.
Prime Minister Theresa May seems to seek to extend UK membership to the EU after John Bercow this week effectively forbids her to return her Brexit plan for the third time. May will head to Brussels for a meeting with EU leaders on Thursday.
"If we get a deal - even if it is not that good deal of Theresa May, then we will have the clear enough that the UK economy will do well," Davies said.
Source: Bloomberg Finance L.P.
Charts: Used with permission of Bloomberg Finance L.P.
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