Investors predict that the pound sterling will remain weak as the campaign for the Conservative party’s leadership emphasizes the difficulties affecting the nation. They have since scaled down on large wagers against the pound last week.
According to the most recent statistics from the US Commodity Futures Trading Commission, investors’ net short positions in sterling modestly declined last week, interrupting a two-week run of rises while maintaining the market’s overall bearish sentiment toward the pound.
The pound has suffered dramatically since the year began due to rampant inflation, modest interest rate increases, and ongoing Brexit issues. It is currently trading at about $1.20, not far from a two-year low of $1.1760 that was reached earlier this month.
UK Politics Could Worsen Sentiment Toward the Pound in the Coming Months
Analysts will be watching the first one-on-one television discussion between Foreign Minister Liz Truss and Chancellor Rishi Sunak later today as the battle for the Tory leadership heats up. Many investors predict that UK politics could worsen sentiment toward the pound in the coming months.
Both candidates have positioned themselves as Thatcherite leaders. They have been pushing for stricter immigration laws to win over party members, many well-off white men in their 60s or older, who will ultimately decide who the country’s next prime minister will be.
The issues that these individuals find interesting might not be popular with other members and might not help to dispel the gloomy sentiment that has been hurting the pound, according to analysts at Rabobank.
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