One of the pound\u2019s biggest bears just threw in the towel.<\/p>\n
Deutsche Bank AG, who in 2015 accurately predicted the pound would drop to a 31-year low the following year, is exiting all its bearish sterling trades after\u00a0U.K. Prime Minister Theresa May called for an early election. George Saravelos, the firm\u2019s global co-head of currency research, described the move as a \u201cgame changer,\u201d two months after he warned that the pound could fall to as low as $1.05 in what was one of the firm\u2019s \u201cstrongest views.\u201d<\/p>\n
Sterling rose to its highest level this year after May\u2019s announcement in Downing Street that she was planning on calling elections for June 8, three years ahead of schedule.<\/p>\n
An early election \u201cis in our view a game-changer for both the U.K.\u2019s Brexit negotiations and sterling,\u201d Saravelos wrote. \u201cWe do not see the election as a mandate for hard Brexit. Instead, assuming current polling proves correct, it should result in a larger and more stable Conservative majority.\u201d<\/p>\n
The pound extended gains soon after Deutsche Bank changed its call. It was trading 1.4 percent higher to $1.2741 as of 3 p.m. in London, the highest since Dec. 6. The currency fell to as low as $1.1841 last year, the weakest since 1985.<\/p>\n
Deutsche Bank stood out in 2015 with a call for the pound to decline to $1.27, and has been bearish on the currency for two years. The firm will \u201clook to revise our sterling forecasts in coming days,\u201d Saravelos wrote.<\/p>\n
Saravelos identified three reasons why early elections will boost the currency:<\/p>\n
Source: Bloomberg<\/p>\n","protected":false},"excerpt":{"rendered":"
One of the pound\u2019s biggest bears just threw in the towel. Deutsche Bank AG, who…<\/p>\n","protected":false},"author":2,"featured_media":1398,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[373],"tags":[],"class_list":["post-3277","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-news"],"jetpack_publicize_connections":[],"yoast_head":"\n