One of asset manager BlackRock’s most senior investment officers has said that he still believes in the pound even as the countdown to Brexit rings in an era of intense financial uncertainty for markets.
Sterling has taken a mighty pounding since the EU referendum on 23 June last year, but Scott Thiel, deputy chief investment officer of global fundamental fixed income at BlackRock, who manages funds totalling about $41bn assets under management, said he likes the pound as an investment.
Mr Thiel said the better-than-anticipated performance of the economy following the Brexit vote is a reason to be positive on sterling.
“The fundamental backdrop in the UK is stronger than expected, inflation seems to be accelerating, and therefore the fundamentals are positive,” Mr Thiel was cited by Bloomberg as saying.
“We are still long through options strategies, but we hedged some of the depreciation,” he added.
Uncertainty surrounding the Brexit negotiations continues to weigh on the currency, which is down about 15 per cent against the dollar since the EU referendum.
“It’s in everyone’s interest, in the European interest as well, to get something sorted out before the end of the two-year period,”Mr Thiel said.
The pound was flat against the dollar on Thursday trading at $1.243, having on Wednesday fluctuated between losses and slim gains against a slew of currencies as Prime Minister Theresa may triggered Article 50.
Most economists believe a hard Brexit scenario is now priced in. However, some are more pessimistic. Earlier this month strategists at Deutsche Bank published an updated forecast, predicting the currency could still fall at low as $1.06 before recovering.
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