Futures Traders Bet Big Against British Pound
March 15, 2010 at 13:47 UTC || By Forex Playmaker
Bloomberg reports that bets against the pound sterling (GBP) have topped those when George Soros took down the Bank of England:
Futures traders are more bearish than ever on sterling amid concern that the currency’s worst annual start in 13 years will continue as the U.K.’s budget deficit approaches the Greek shortfall that roiled the euro.
Wagers on the pound weakening against the dollar outnumber futures that profit on a rise by eight times more than when George Soros made $1 billion betting against the currency in 1992, the year Prime Minister John Major’s Conservative government was forced to withdraw from the European Exchange Rate Mechanism. Sterling fell 19 percent that year.
Many are betting that continued economic uncertainty could lead to a double dip in the UK. As a result, the GBP/USD could revisit the mid- to low-1.30s, a substantial drop from its present valuation above 1.50.
When Soros took down the BOE in 1992, a number of smaller investors reaped huge profits by riding Soros’ coattails while those who bet against him were destroyed. The amount of money currently at play against the GBP should convince even the most stubborn of traders to either join the parade of GBP shorts, or simply get out of the way.
Full Article: Pound Bears Bet More Than When George Soros Beat BOE
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