31/12/2018 - Sterling Repositions Pre January Vote

GBP

Sterling ended the week in the same vein as it had begun, with quiet trading punctuated by the repositioning of the currency among investors.

Sterling had initially drifted higher on Friday as a weak dollar had promoted some investors to cut their short positions against the pound. However the overall short positions against the British currency showed another increase, with total bets rising to $4.8 billion, according to futures data, after a brief drop. Friday also saw the end of a decline in the number of mortgages approved by British high street banks, with the first year-on-year rise since September 2017.

We also saw an increase in Sterling implied volatility, a gauge of expected currency swings, rising to a two-week high of 13 percent. With lawmakers set to discuss the Brexit agreement next month, the vote commencing January Vote is seen as the next big market event for Sterling.

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