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Dec. 5, 2019, 5:00 a.m. EST

Pound could hit $1.35 if Conservatives win and Brexit pact reached, UBS says

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By Steve Goldstein, MarketWatch

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The pound has been rising in value.

The pound could reach $1.35 if the Conservatives win the December 12 general election and a Brexit pact is ratified by Parliament, according to a strategy note from UBS.

The UBS chief investment office did say it will be tough for sterling to move past $1.35 as the next phase of negotiations ensues.

“These talks will probably be nearly as drawn-out and fractious as their predecessors, and the prospect of the U.K. reverting to a World Trade Organization trade relationship with the EU will loom large once again, with the next critical deadline possibly arriving by July. By then, the U.K. would have to decide whether to extend the transition period beyond December 2020,” it said.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0077% again was higher on Thursday, rising to $1.3133 from $1.3105. The strength in sterling, which is up 6.5% over the last 3 months, weighed on the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.09% , since multinationals generate the bulk of their revenue outside of Britain. The FTSE 100 fell 0.22% to 7172.36.

Also read: Europe stocks advance while British equities get left behind as sterling climbs

Elsewhere, M&G shares /zigman2/quotes/214468176/delayed UK:MNG +2.04%  dropped for a second day, losing 4%, after the fund manager on Wednesday suspended redemptions from its flagship property fund

US : Tullett Prebon
+0.0001 +0.0077%
Volume: 0.0000
Aug. 7, 2020 4:59p
+5.24 +0.09%
Volume: 0.00
Aug. 7, 2020 4:59p
UK : U.K.: London
169.85 p
+3.40 +2.04%
Volume: 2.79M
Aug. 7, 2020 4:35p
P/E Ratio
Dividend Yield
Market Cap
£4.42 billion
Rev. per Employee

Steve Goldstein is MarketWatch markets editor for Europe. Follow him on Twitter: @MKTWgoldstein.

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