LONDON, June 9 (Reuters) - British government bonds should benefit from political uncertainty in Britain, while sterling is likely to remain under pressure, Franklin Templeton’s head of European fixed income David Zahn said on Friday.
Zahn holds a long position in British gilts and manages over 2 billion euros ($2.2 billion) in European fixed income for fund management firm Franklin Templeton.
He said that while sterling was undervalued, the currency was likely to continue to be driven by politics, and it could therefore remain weak.
“Political events over the coming months will be what drives the currency so we do not have a position in the currency at the moment,” he said.
Voters in the UK dealt Prime Minister Theresa May a devastating blow in a snap election she had called to strengthen her hand in Brexit talks, wiping out her parliamentary majority and throwing the country into political turmoil. (Reporting by Dhara Ranasinghe; Editing by Jemima Kelly)