Pound Optimism Fades Along With Brexit Glow for Asset Managers

Allianz GI, BlueBay see euro reaching March highs vs sterling
Lockdown, talk of U.K. break-up seen weighing on currency

WATCH: The U.K.’s third lockdown and the prospect of negative rates will weigh on the pound, Credit Agricole says.(Source: Bloomberg)

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By William Shaw

January 6, 2021 at 5:00 AM UTC

Updated on

January 6, 2021 at 3:54 PM UTC

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The pound’s Brexit deal honeymoon looks well and truly over, with the currency off to the worst start to the year among its Group-of-10 peers.

Allianz Global Investors has taken a short position on sterling against the euro, citing the bare-bones nature of the U.K.’s trade agreement with Brussels. BlueBay Asset Management LLP remains bearish given the economic headwinds, while Mediolanum International Funds says it’s too soon to go overweight as the threat of the coronavirus remains.