Halister News

(Bloomberg) -- Investec AM re-entered sterling shorts via a trade-weighted basket of currencies this week after the currency rallied ~4% from recent lows, portfolio manager Russell Silbertson says in an interview.

• Good time to re-enter with U.K. data showing a more serious downturn, especially as markets haven’t really considered the impact of any Brexit after the June 23 referendum
  • Expect more severe market reaction ahead as magnitude of risk means currency needs to reflect some risk premium
  • Investec AM expects market “panic” in vote run-up similar to that seen ahead of the 2014 Scottish referendum, or possibly on grander scale
• U.K. fundamentals also pretty poor, with a record current- account deficit and low savings ratio
• Would take profit and turn neutral even before the referendum, if the pound were to fall ~5%
  • Covered shorts earlier this year as signals showed sterling was very oversold; whole position was covered in April, once the currency started to rebound