Goldman Sachs says pound levels now attractive

FILE PHOTO: UK pound coins plunge into water in this illustration picture, October 26, 2017. REUTERS/Dado Ruvic/Illustration

(Reuters) - Odds of a damaging no-deal Brexit are “meaningfully lower” than the market is implying and for investors willing to look through short-term volatility, current sterling levels are attractive, investment bank Goldman Sachs said.

The bank said in a note late on Friday the market was pricing 40%-45% odds of Britain ending its post-Brexit transition period without reaching a free-trade agreement with the European Union.

While those odds could rise further, Goldman Sachs said the UK government was aware how damaging a no-deal outcome would be to the economy.

“For investors willing to look through some near-term volatility, current levels for sterling longs now look attractive, in our view,” it added.

Reporting by Sujata Rao; Editing by Maiya Keidan