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Sterling could gain appeal if dropped to $1.17–Report

Sterling could gain appeal if dropped to $1.17–Report

Mubasher: The sterling pound’s (GBP) sudden spike against the US dollar led some to believe that the UK currency is close to a point where value-seeking investors are waiting.

The UK pound surged on Thursday after German Chancellor Angela Merkel hinted the possibility of a solution to the Brexit deadlock before 31 October.

After enduring a rout of around 9% from this year’s peak, a further drop of about 4%, sending the currency to levels last seen was in 1985, could give it an appeal, Bloomberg said, citing State Street Bank and Union Bancaire Privee.

While the time has not come to wager on a sterling rebound, further drops in the run up to the 31 October deadline could put a shine on the UK currency.

Both institutions agree on a $1.17 as a level that makes the pound attractive enough to encourage investors to take long positions.

That said, this would still depend on their judgment on the extent of the unfavourable headlines behind the drubbing, Bloomberg said.

By 1:46 pm GMT, the GBP/USD pair inched down by 0.07% to $1.2242, while the EUR/GBP pair ticked down by 0.01% to GBP 0.9042.