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Pound Rally to 2020 High at Risk of Setback Even With Trade Deal

  • After steamrolling peers, currency looks expensive to some
  • JPMorgan sees modest Brexit bump, but little value in sterling
Updated on

The pound’s best days may be behind it, even if the U.K. and European Union sign a trade deal.

Sterling rose as much as 1% to $1.35 on Thursday, touching its strongest level since December 2019. Yet the relative cost of hedging against a weaker sterling through year-end is the highest since April, according to a gauge of positioning and sentiment. And over the past month, hedge funds and other leveraged funds have increased short bets against the currency, data by U.S. Commodity Futures Trading Commission show.