Hedge Fund Bets on Strong Pound Hit a Six-Year High Before Vote
- Leveraged funds had biggest GBP long postions since 2018: CFTC
- Confidence of Labour victory boosted demand for UK assets
An official counts ballots following the UK general election.
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Hedge fund bets for a stronger pound surged to their highest in more than six years ahead of last week’s UK election as investors were confident that a Labour victory would bring stability to the country’s politics and economy.
Net long pound positions held by leveraged funds jumped to their highest level since April 2018 in the week to July 2, the latest CFTC positioning data shows, just days before the July 4 vote. These speculative bets increased as the pound rallied to its strongest against the dollar in nearly a month, while hovering close to a two-year high versus the euro.