September 3, 2019 / 1:53 PM / 12 days ago

Brexit: Deutsche would ditch bearish sterling bet if election called for October 14

FILE PHOTO: The logo of Deutsche Bank is pictured in London, Britain July 8, 2019. REUTERS/Simon Dawson/File Photo

LONDON (Reuters) - Deutsche Bank said on Tuesday it would drop its bearish bet on sterling should Prime Minister Boris Johnson call a general election for Oct. 14, as UK lawmakers braced for a showdown over the nation’s exit from the European Union.

The bank would turn neutral on the UK currency, ending a short recommendation that has been in place since March 29, just before the original Brexit deadline was extended until mid-April and then again to Oct. 31, it said in a research note.

“Should it materialise, we see a pre-31 October election as the least worst of all scenarios this week, reducing the prospect of a no deal Brexit,” macro strategist Oliver Harvey said.

“This is because, of the three possible outcomes, two are more likely than not to lead to either an orderly Brexit or no Brexit at all.”

Reporting by Josephine Mason; Editing by Tommy Wilkes

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