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Pound Bulls Face Reckoning After Currency’s Best Week This Year
Traders who drove the pound to its best week of the year have a lot riding on the next inflation report, where even a faster-than-expected rate could work against them. Pricing in the options market suggests investors are already revving up to sell, concerned that something in the economy will eventually break under the weight of ever-higher rates. Positioning is also looking stretched as traders trim the most-bullish wagers in half a decade. For months, investors have been piling in to lock in juicer returns as accelerating inflation forced the Bank of England to push ahead with its most aggressive tightening drive ... (full story)