Hedge funds and investment managers are unloading Sterling in increasing numbers.

Thus, according to the latest weekly data from the US Commodity Futures Trading Commission (CFTC) more speculators are shorting the pound than buying it for the first time in five months. So much so that doing so is now the second most popular trading position amongst currency speculators.

That follows on recent weaker than expected macroeconomic figures and dovish rhetoric out of the Bank of England. Compounding matters is the less than expected boost to UK exports from past weakness in the pound, as the Bank's own Martin Weale explained in a speech this past weekend.

In a similar vein, according to The Times the Treasury has set up a unit to explore changes to the Bank of England's remit as political pressure mounts for action to boost economic growth.

The small internal group has been created to examine whether there is a need to alter the Bank's 2% inflation target — a move likely to stoke speculation about an overhaul before the arrival of Mark Carney as Bank of England governor this summer, the newspaper speculates.

Worth pointing out in that regard, the Financial Times today cites Franklin Templeton, one of the biggest bond investors in the world, as having indicated that they have slashed their positions in the gilt market on the expectation that yields will climb and sterling will weaken.

AB

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