Sterling tiptoes higher after turbulent week
By Amanda Cooper
LONDON, July 26 (Reuters) -The pound rose on Friday but was still headed for a second consecutive weekly fall against the dollar after a week of turmoil across global markets hit higher-yielding assets and as investors switch focus to next week's Bank of England meeting.
The pound, which hit one-year highs last week above $1.31, is heading for a 0.5% decline against the dollar this week.
It's still on track for a gain of 1.6% this month and remains this year's top-performing G10 currency against the dollar, with a 1.1% rise, compared with runner-up the euro EUR=EBS, which is down 1.67% against the dollar this year.
But the recent swell of volatility across markets has hit the pound harder than currencies that are lower yielding, such as the yen or the Swiss franc.
Sterling GBP=D3 was up 0.14% on the day at $1.28685.
Futures traders currently hold the biggest bullish bet on sterling in history, according to weekly data from the U.S. markets regulator GBPNETUSD=.
Speculators currently hold a net long position worth $10.77 billion that has almost trebled since the start of this month.
In an environment such as the one this week, when currencies with lower interest rates tend to perform better, sterling has come under pressure.
Broker IG notes that its proprietary retail trader data shows just 37.63% of traders are net-long, with a ratio of 1.66 short traders for every long trader.
In theory, this would suggest the pound has scope for more gains, given the majority of the retail market is short, but IG believes the deterioration in investor sentiment might play a bigger role.
"While a contrarian view to crowd sentiment suggests GBP/USD prices may continue to rise due to the majority being net-short, recent changes in sentiment indicate a potential downward reversal in the current GBP/USD price trend," IG said.
The Bank of England meets next week and markets are currently attaching roughly a 50/50 chance of a rate cut.
This is slightly at odds with a majority of economists polled by Reuters that believes the central bank will deliver a quarter-point cut next week.
It has been harder than usual for investors to work out what the thinking among BoE policymakers might be, given that most have not spoken publicly for more than two months due to rules in the run-up to a July 4 national election.
Investors have been left guessing whether recent higher-than-expected services prices are enough to prevent the central bank cutting rates from their 16-year high of 5.25%.
Graphic: World FX rates in 2023 http://tmsnrt.rs/2egbfVh
Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
Reporting by Amanda Cooper; Editing by Gareth Jones
Activos relacionados
Últimas noticias
Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.
Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.
Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.
