Pound Decline Seen Enduring in Hedge-Fund Reversals

BusinessWeek – Traders are viewing the pound’s 8 percent slump since mid-year as the start of a long-term decline as speculation grows that U.K. interest rates will stay at record lows well into 2015.

After being more optimistic on the outlook for the pound than for any other major currency in July, hedge funds now hold the most bearish position on sterling versus the dollar in more than a year, data from the Commodity Futures Trading Commission in Washington show. The last time speculators deserted Britain’s currency so fast was mid-2013, shortly before it tumbled to a three-year low of $1.4814. The currency traded at $1.5665 as of 11:02 a.m. in London.

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