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Hedge funds bet on pound rally

The number of call options has dropped, but hedge funds lean slightly bullish on the pound

In the aftermath of Kwasi Kwarteng’s mini-budget the pound traded to a low of $1.03. It has somewhat recovered, where it now trades at $1.14
In the aftermath of Kwasi Kwarteng’s mini-budget the pound traded to a low of $1.03. It has somewhat recovered, where it now trades at $1.14 Photo: Matt Cardy/Getty Images

Hedge funds have tempered their expectations of the pound's rise after the mini-budget debacle. Overall they are neutral on sterling’s movement but lean slightly towards it regaining some value.

Data from Chicago-based exchange CME and London research firm Macro Hive found that on balance, hedge funds were still net long on the pound, holding 4,000 call option contracts — bets that believe the pound will go up.

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