Hedge funds and traders see the wild swings seen in British markets in the past couple of days as having provided an “opportunity of a lifetime” for currency and bond trading, according to a report by Reuters.
The market turmoil was sparked by Friday’s ‘mini-budget’ announcement of £45 billion of unfunded tax cuts with sterling subsequently losing 6 per cent of its value and UK government bond prices soaring. The Bank of England stepped in on Wednesday to try and shore up the markets by announcing a plan to buy £65 billion of UK bonds by 14 October.
The report quotes John Floyd, a currency trader for 30 years and the boss of hedge fund Floyd Capital Management as saying that the current macroeconomic and geopolitical environment is providing some of the greatest profit opportunities in the currency space since the end of Bretton Woods in the early 1970s”, reference to the US global conference that established a set of guidelines for the international financial system.
