January 10, 2019 / 2:05 PM / 8 months ago

Time to buy sterling as case for second referendum builds - BNP Paribas

FILE PHOTO: Pound coins are seen in this photo illustration taken in Manchester, Britain September 6, 2017. REUTERS/Phil Noble/Illustration

LONDON (Reuters) - Sterling should strengthen more than 5 percent from current levels to $1.36 and 85 pence per euro as consensus builds for a second referendum on Britain’s European Union membership, BNP Paribas said on Thursday.

Its current base case was for Article 50 to be extended with a “second EU referendum the likely outcome, or even a pre-condition for an extension.

“Enough downside is priced in for now, in our view. The FX market appears to have priced in enough political and economic uncertainty,” the French bank said.

The pound is currently trading at $1.2770 GBP=D3 and 90.325 pence EURGBP=D3 per euro.

Reporting by Tommy Reggiori Wilkes, Editing by Abhinav Ramnarayan

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