Hedge Funds Are Uber-Bearish On The British Pound
The British pound was trading at $1.2872 Monday afternoon and is within striking distance of its post-Brexit and multi-decade lows of $1.2798.
According to Market Watch, bearish bets by speculators against the currency currently stands at an all-time high. The publication, citing data from the Commodity Futures Trading Commission, reported that net short positions against the British pound futures stood at $7.3 billion as of last week.
It may not be surprising that the investment community sees trouble ahead for the United Kingdom, especially in the uncertain post-Brexit vote world.
The negative outlook was confirmed when the Bank of England lowered its key interest rate for the first time in seven years to an all-time low of 0.25 percent as part of a stimulus package. The central bank also slashed its 2017 growth estimate by the largest amount since it began offering forecasts in 1993.
Market Watch added that many market participants expect even more easing measures to be announced in the future.
"This demonstrates why, even in a murky short-term environment for the dollar, we still think there is opportunity in GBP downside," Market Watch quoted Goldman Sachs' currency strategists Robin Brooks and Michael Cahill as saying, in a note to clients.
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