How British Pound Speculator Positions Changed Last Week
British pound bounced back last week
The British pound (FXB) fell 0.33% against the US dollar (UUP) for the week ending February 2, 2018. The pound (GBB) closed at 1.4123, retreating from the post-Brexit high of 1.4346 in the third week of January. Except for the minor fall in UK manufacturing activity, there was no major negative news from the UK economy. The rebound of the US dollar in the forex (foreign exchange) markets was the key reason for this minor decline in the pound last week since traders may have wanted to lock in the profits amid fears of an extended rebound of the US dollar.
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Speculators trim bullish positions
According to the latest COT (Commitment of Traders) report released on February 2, 2018, by the CFTC (Chicago Futures Trading Commission), speculators have trimmed their overall bullish positions by a marginal 1,300 contracts. The total outstanding net long contracts were 31,741 compared to 33,045 the week before. Any surprises from the Bank of England could further increase long interest for the British pound.
Week ahead for the British pound
Next week, the United Kingdom reports its service sector activity and retail sales performance for January, but the key focus could be on the Bank of England’s rate-setting meeting and the quarterly inflation report. The tone of the Bank of England could make a difference this week. If the economic and inflation outlook remains positive, there could be a strong rebound in the British pound.
In the next part of this series, let’s take a look at the sharp fall in the Japanese yen last week.