Pound Seen Stretched as Bullish Contracts Mimic 2011: Currencies
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Not since early 2011 have investors set up as many trades seeking to profit from the pound’s advance as they have this month, and with the currency already having gained 14 percent from last year’s low, that’s making strategists nervous.
“We’re now becoming extremely cautious as to the amount of upside for sterling,” Ian Stannard, the head of European currency strategy at Morgan Stanley in London, said in an April 24 phone interview. In Stannard’s view, the market can only get less bullish from here, weighing on further gains. “Positioning is going to be a big factor” in how the pound trades, he said.