Traders rediscover their taste for sterling, CFTC data shows
By Anneken Tappe
The British pound may have started October on the lower side, but traders seem to have had a change of heart lately when it comes to the British currency, data from the Commodity Futures Trading Commission showed.
On Sept. 26, net futures trader positions in sterling turned positive for the first time since November 2015, meaning long positions outweighed short positions for the first time in almost two years, the data showed.
The pound has fallen from the year-to-date high of $1.359 against the U.S. dollar that it reached in mid-September, and since then speculative demand has grown.
Sterling initially rallied on the back of a more hawkish-sounding Bank of England. Most notably, in mid-September BOE Gov. Mark Carney said that interest rates could rise faster than the market expected (http://www.marketwatch.com/story/pound-rallies-after-boe-warns-rates-could-rise-faster-than-forecast-2017-09-14).
Also read:Euro, loonie, sterling still offer more upside even after hawkish Fed, analysts say (http://www.marketwatch.com/story/euro-loonie-sterling-still-offer-more-upside-even-after-hawkish-fed-analysts-say-2017-09-21)
Since then it pulled back, hitting a low of $1.3276 on Monday.
In fact, the pound was one of the worst performers on this first trading day of the year's final quarter, sliding both against the dollar and the euro , but according to market participants, this might just make it a more attractive buy.