Bets against sterling saw their biggest two-week rise since 2013 in the first half of a September, a sign that hedge funds and other leveraged funds upped their short position as Liz Truss took up her new role as Britain’s Prime Minister, according to a report by Reuters.
The report cites Vanda Research, which uses data from the US Commodity Futures Trading Commission (CFTC), as revealing that the number of GBP/USD short contracts jumped by 17 percent in the first two weeks of September.
Sterling plunged to a record low against the dollar on Monday of this week, and British bond prices collapsed, after new Chancellor Kasi Kwarteng on Friday announced a raft of tax cuts to be funded by public borrowing including scrapping the top rate off income tax and the cancellation of a planned rise in corporate taxes.
Kwarteng has hinted that more tax cuts are to come which in the view of Louis Gargour, the chief investment officer and managing partner of the $550 million hedge fund, LNG Capital, make sterling “an easy short”.
