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Goldman Sachs Says Buy Sterling as Brexit Deal Likely

Goldman Sachs is advising clients to buy sterling, noting that recent events indicate Britain and the European Union were converging towards a post-Brexit trade deal which it reckons could be done by early November.

The U.S. investment bank said on Monday that while the risk of a breakdown in negotiations could not be ruled out, “our core view remains that a “thin” zero-tariff/zero-quota trade agreement will likely be struck by early November, and subsequently ratified by the end of December”.

While Goldman analysts saw the probability of 'no deal' likely persisting beyond the mid-October European Council meeting, they suggest going 'long' the pound versus the euro, targeting a rise to 87 pence, from the current 91 pence.

A Brexit deal would significantly reduce the risk that the Bank of England would introduce negative interest rates, the bank added.

Reporting by Guy Faulconbridge and Sujata Rao ; Editing by Muralikumar Anantharaman

Source: Reuters

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