Pound Recovers From 2009 Low as HSBC, BlackRock Argue Bull Case

  • Sterling also rallies versus euro on Draghi's stimulus hints
  • BOE's Weale says he's `fairly upbeat' about U.K. economy

The pound rebounded from the lowest level since 2009 against the dollar as the world’s largest asset manager and Britain’s biggest bank made the case for turning bullish on the U.K. currency.

BlackRock Inc. said it’s taking a long position, or a bet the U.K. currency will advance, versus the euro, while HSBC Holdings Plc boosted its year-end forecast to $1.60 from $1.50 previously. Sterling rallied from its weakest level in a year versus the euro after European Central Bank President Mario Draghi’s hints of further stimulus sparked a slide in the shared currency.

Sterling has fallen against 11 of its 16 major peers this year, weighed down by the risk of a U.K. exit from the European Union and a dovish Bank of England. Policy maker Martin Weale said in an interview with Bloomberg on Thursday that the weaker currency could “easily offset” the effect of lower oil prices and wage growth that are holding down inflation, adding that he’s “fairly upbeat” about the economy.

“The pound has tumbled this year and, based on both fundamentals and valuations, we believe this depreciation is excessive,” Marilyn Watson, head of unconstrained fixed-income product strategy at BlackRock in London, wrote in a note. The asset manager said it sees the BOE raising its 0.5 percent main rate this year.

The U.K. currency was little changed at $1.4202 as of 6:21 p.m. London time, after earlier sliding to $1.4080, the lowest since March 2009. Sterling appreciated 0.5 percent to 76.35 per euro, compared with Wednesday’s low of 77.56.

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