Sterling Shorts Are Back To Levels Not Seen Since The Brexit Referendum

Bearish pound speculators are holding nearly the same amount of net short positions in sterling as they did in July 2016, just after the referendum for the U.K. to leave the European Union, suggesting that the market is worried about how Brexit will look come March 29.

According to CFTC latest data, sterling shorts have increased by 18,000 to 79,000 in the week ending Sept 18 — this is the highest level of short positions in four months.

The pound traded higher Monday morning, both against the dollar and the euro, reversing some of the losses it suffered on Friday after E.U. leaders rejected British Prime Minister Theresa May's deal proposal. May said in a speech after that a no-deal scenario was better than a bad deal.

GBP/USD (£1.3152) remains handcuffed to Brexit rhetoric and PM May woes and has reclaimed the psychological £1.31 handle after comments this morning from U.K Brexit Minister Raab indicated that he is confident he will make progress on Brexit.

There are also whispers that May has started contingency planning for possible snap election in November. However, Brexit Secretary Dominic Raab reiterated that "no election is planned."

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