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Speculators less bearish on the pound for second week running

Mon, 17th Aug 2020 09:09

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, Aug 17 (Reuters) - Sterling edged up against the
pound and euro in early trading on Monday, after weekly futures
data showed that the net short speculative position on sterling
got smaller for the second week running, ahead of a new round of
Brexit talks this week.

Having rallied in July, the pound has been more range-bound
in August. It rose slightly on Monday, helped by the dollar
being a touch weaker after the United States and China postponed
their review of the Phase One trade deal.

Versus the dollar, the pound was at $1.3101 at 0743 GMT, up
0.1% since the previous session's close in New York.

Euro-sterling was broadly flat at 90.46 pence per euro
.

Speculators' net bearish position on the pound got smaller
in the week to Aug. 11, according to weekly CFTC futures data
released on Friday. The speculative short position
on the pound is the smallest in four months.

A new round of Brexit negotiations is due to begin on
Tuesday. The issue of whether London's financial sector will be
able to access the European Union's market after Brexit is in
focus.

The EU's financial services chief said that the City of
London may not find out if it will have access to the whole of
the EU's market until after the end of the year, the Financial
Times reported.

"The latest headlines on this topic warn that there may be
delays to financial equivalence discussions, meaning possible
delays for UK banks in securing pan EU market access rights,"
wrote ING strategists.

"There is still much uncertainty here and despite BoE’s
Haldane talking up UK recovery prospects, we still prefer
EUR/GBP to be heading to the 0.91/92 area into September," they
added.

The Bank of England's chief economist, Andy Haldane, wrote
an op-ed in the Daily Mail on Saturday, saying that the UK's
economy is on course for a rapid recovery from the coronavirus
crisis due to strong consumer spending.

Haldane, who voted against expanding BoE stimulus in June,
said that the central bank will continue to support the economy
until recovery is well under way.

Elsewhere, British Trade Secretary Liz Truss said Britain
would fight the United States' tariffs on Scotch whisky, writing
in an op-ed in the Telegraph on Sunday.
(Reporting by Elizabeth Howcroft; Editing by Giles Elgood)

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