Shorts against pound at two-year high as no-deal looms

Josh Hall's picture
by Josh Hall

Traders are holding more short positions against the pound than at any time in two years as concern about a no-deal Brexit continue to grip markets.

The Times reports that traders held 107,406 contracts shorting sterling in the week to 6 August - about twice as many as were held just before the 2016 referendum.

A short position means that speculators are betting against the performance of the currency.

Net short positions recorded by the US Commodity Futures Trading Commission (CFTC) now total nearly $8 billion - a fraction of the total positions likely to be held globally.

But in some quarters, confidence in the government's ability to mitigate the danger of no-deal seems to be growing.

This morning Lord Wolfson, the Eurosceptic boss of retailer Next, said he is encouraged by Prime Minister Boris Johnson's preparations for Brexit.

Wolfson said the worst-case scenario for no-deal would now consist of "mild disruption".

Speaking on the BBC's Today programme, he said: "I think the encouraging thing is that we are rapidly moving from the disorder and chaos camp to the well-prepared camp."

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