Bets in opposition to the pound hit 16-month excessive amid rate of interest minimize hopes | EUROtoday

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Traders are ramping up bets that the pound will fall within the coming months amid a rising conviction that the Bank of England will minimize rates of interest earlier than the US.

The degree of wagers positioned by buyers in opposition to sterling has hit a 16-month excessive, in accordance with knowledge from the US Commodity Futures Trading Commission, first reported by the Financial Times.

Meanwhile, asset managers haven’t been extra pessimistic concerning the future energy of the pound since March final yr, in accordance with State Street, one of many world’s largest custodian banks.

The pound has fallen 1.5pc in opposition to the greenback this yr, though that has nonetheless made it the strongest performer among the many G10 group of main currencies.

However, merchants count on the Bank of England, which broadcasts its subsequent rate of interest resolution tomorrow, will minimize borrowing prices earlier and sooner than the US Federal Reserve.

Derivatives trades point out {that a} first rate of interest minimize will occur in Britain by September on the newest, whereas cash markets counsel it may very well be as late as November in America.

On Tuesday, Minneapolis Fed President Neel Kashkari, who doesn’t have a vote on charges this yr, prompt the Federal Reserve could have to forgo reductions in borrowing prices this yr attributable to cussed inflation.

Read the most recent updates beneath.

https://www.telegraph.co.uk/business/2024/05/08/ftse-100-markets-latest-news-currency-interest-rates-cuts/