Brexit sterling shorts back to July 2016 levels

“Bear” pound speculators hold nearly the same amount of net short positions in sterling as they did in July 2016.

This would suggest that the markets worries about how the Brexit divorce on March 29, 2019 will look, and the uncertainty surrounding it, has got back to levels it was at just after the referendum vote.

According to CFTC latest data, sterling shorts have increased by +18K to +79K in the week to Sept. 18 – this is the highest level of “short” positions in four-months.

Pound bid

The pound trades higher this morning, both against the dollar and the euro, reversing some of the losses it made on Friday after E.U leaders rejected U.K PM Theresa May’s Brexit deal proposal and May reiterating in a speech 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 PM May has started contingency planning for possible snap election in November – however, Raab reiterated that “no election is planned.”

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell