LONDON May 15 Sterling rose towards $1.30 again
on Monday, with figures showing that speculators have cut
bearish bets on the currency by the most in more than a year and
the third most on record.
The overwhelmingly negative view on the pound dominating
foreign exchange markets since the Brexit referendum in June
last year has abated since British prime minister Theresa May
called a snap general election a month ago.
Many sterling "bears", including big currency trading banks
like Deutsche Bank and Bank of America Merrill Lynch, ditched
their ultra-gloomy forecasts and the data shows many playing the
Chicago futures markets have done the same.
"Capitulation is the driver. Bears are giving up," said Kit
Juckes, head of FX strategy at Societe Generale in London.
Sterling was up 0.3 percent against the dollar in early
trade in Monday to $1.2925, and the euro was down 0.2
percent at 84.60 pence.
Data late on Friday showed that International Money Market
accounts on the Chicago Mercantile Exchange slashed their net
short sterling position to 46,798 contracts in the week to
Tuesday. That effectively means bets on sterling falling are the
smallest since July last year.
The change of 34,566 contracts from the previous week was
the third biggest position move in favour of the pound since IMM
records began in the mid 1990s.
(Reporting by Jamie McGeever; editing by Alexander Smith)