HomeEconomyHedge funds bearish on UK as Truss becomes PM Economy Hedge funds bearish on UK as Truss becomes PM By farahat September 26, 2022 0 147 views Share FacebookTwitterPinterestWhatsApp GBP /USD -1.% Add to Watchlist/Remove from Watchlist Add to Watchlist Add Location Job added successfully: Please name your portfolio type: purchase Sell date: quantity: price Integral value: Leverage: 1:1 1: 1: 1: 1: 54 1: 11 1 : 100 1: 50 1: 50 Committee: 400 create new Watchlist Creation 400 2022 Create a New Holding Portfolio Add Create 2013400 + Add another position to close VNDA -1.17% 95 Add to/Remove from Watchlist to watch list Add Location Job added successfully: Please name your holdings type: purchaseSell date: quantity: price Point value: Leverage: 1:1 1: 1: by Nell McKenzie LONDON (Reuters) – Bets against the British pound hit a record high in the first half of September since Biggest increase in two weeks since , which suggests that hedge funds could be UK in Liz Truss The new prime minister has increased short positions. According to Wanda (NASDAQ: VNDA ) research, using data from the CFTC (CFTC) data, short contract GBP/USD Leveraged fund gains in the first two weeks of September percentage points. Sterling hit a record low against the dollar on Monday, as UK bond prices tumbled on mounting fears over the new government’s fiscal plan, triggering a Bank of England emergency The call for a hike. restore confidence. On Friday, Truss’ finance minister, Quasi Kwaten, scrapped the top income tax rate and scrapped plans to raise corporate taxes. Plan – Plan to subsidize energy bills on an expensive basis. Speculators have cut their net short positions in GBP to ,95 last week’s contract valued at $3.9 billion, down from previous net short position , contracts, from data shown by the CFTC. Truss took over as prime minister on September 6. with the dollar soaring 95 Investors have been shorting most major currencies, including the pound, as the Federal Reserve is raising rates faster than its peers. Speculators have maintained short positions against the pound every week since February, CFTC data showed. In a foreign exchange market where trillions of dollars are traded every day, speculators’ recent net short positions worth $3.9 billion may be It looks small. But the foreign exchange market is highly opaque, and the CFTC data is seen as a good window into the positioning of the broader market. Louis Gargour, Chief Investment Officer and Managing Partner $95 Million hedge fund, LNG Capital said serious funds began shorting the pound in July. Gargour had a position in sterling but couldn’t confirm if he was short due to UK marketing regulations. Gargour said Truss was known for policies in direct conflict with the Bank of England’s efforts to control inflation and tighten fiscal policy. “And then the Truss tax break came along, basically saying we’re going to massively stimulate the economy, increase inflation and generate More debt, thus nullifying lower BoE rate hikes. And, she’s said there’s more to come. For the market — it’s just a simple short,” Gargour said. Global macro strategist at Vanda Research, Viraj Patel, said the Bank of England intervention may not even stem the bearish market sentiment. ” do a 10 Will today’s bps really fix anything? We are skeptical if the UK government continues on a fiscally irresponsible path,” Patel said. As long as the government refuses to join hands with the Bank of England, LNG Capital’s Gargour said it would be “a direct hit 25- 10 GBP to USD.” The Bank of England said on Monday that it would not hesitate to raise interest rates to meet its 2% inflation target and was monitoring financial markets closely. The UK Treasury said that Kwarteng will develop a “medium-term fiscal plan” on November 1 , as well as growth and borrowing projections from the Office of Budget Responsibility. 54 Share FacebookTwitterPinterestWhatsApp Previous articleCheryl Dolins replaces Julia Franz as Fox comedianNext articleLowered profit forecasts raise concerns on shaky Wall Street farahat RELATED ARTICLES Economy Asian stocks slip on rate worries, yen in focus October 3, 2023 Economy Marketmind: New quarter, same old market dynamics October 3, 2023 Economy ByteDance’s valuation slumps to $223.5 billion in stock buyback – The Information October 2, 2023 LEAVE A REPLY Cancel reply Comment: Please enter your comment! Name:* Please enter your name here Email:* You have entered an incorrect email address! Please enter your email address here Website: Save my name, email, and website in this browser for the next time I comment. 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