Despite recent signs that sterling’s strong rally so far this year is flagging, hedge funds and other currency speculators have upped their bullish bet on the pound to the highest level in nine years, according to a report by the Financial Times.
Despite recent signs that sterling’s strong rally so far this year is flagging, hedge funds and other currency speculators have upped their bullish bet on the pound to the highest level in nine years, according top a report by the Financial Times.
With inflation remaining stubbornly high in the UK relative to other economies including the US, the thinking seems to be that the Bank of England will need to continue with its programme of rate hikes for longer than other central banks, which seem to be nearing the end of their tightening cycles.
The interest rate sensitive two-year UK government bond yield hit a 15-year high of 5.40 per cent on Monday, as sterling traded at $1.2698 on Monday afternoon, a 5 per cent rise against the dollar since the start of January.
The report cites US Commodity Futures Commission data as revealing that leveraged non-commercial funds upped their net long positions on sterling to almost 52,000 contracts for the week ended Tuesday, 27 June, the highest level seen since July 2014.
