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Felicia Tan
in
Forex
June 2 22:02

GBP reached a three-week high

At the same time, net short positions of currency speculators are growing for the 12th consecutive week.
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British pound rose to a three-week high against the widely weakening US dollar on Monday as Britain softened its quarantine. However, the speculators' net short position on the sterling is the largest in the last five months, which indicates that traders remain negative for the British currency.
The pound is affected by a number of factors: the high British COVID-19 mortality rate, the lack of progress in the negotiations on Brexit, the gloomy economic outlook and the Bank of England (BoE) position, given its recently stated attitude towards negative interest rates.
New rules designed to ease quarantine in the UK came into force on Monday,.
This week, the 4th round of trade negotiations on relations with the European Union will begin amid Britain leaving the bloc. The UK may request an extension of the current transition period until July 1, which should end in December.
Against the widely weak dollar, the pound reached a three-week high of US$1.2425 dollars at about 08:00 UTC before weakening slightly. The latest quotes are at US$1.2390.
The pound strengthened by 0.2% against the euro, last time trading for 89.73 pence.
Last time investors showed such a strong bearish mood on the pound was in the run-up to the elections in December 2019.
British producers experienced another sharp decline in May, but the pace of decline weakened after a record fall in April. Quarantine caused most of the economy to stop, PMI data showed.