Speculators less bearish on the pound for second week running

LONDON: Sterling edged up against the pound and euro in early trading on Monday, after weekly futures data showed that the net short speculative position on sterling got smaller for the second week running, ahead of a new round of Brexit talks this week.

Having rallied in July, the pound has been more range-bound in August. It rose slightly on Monday, helped by the dollar being a touch weaker after the United States and China postponed their review of the Phase One trade deal.

Versus the dollar, the pound was at $1.3101 at 0743 GMT, up 0.1% since the previous session's close in New York.

Euro-sterling was broadly flat at 90.46 pence per euro.

Speculators' net bearish position on the pound got smaller in the week to Aug. 11, according to weekly CFTC futures data released on Friday. The speculative short position on the pound is the smallest in four months.

A new round of Brexit negotiations is due to begin on Tuesday. The issue of whether London's financial sector will be able to access the European Union's market after Brexit is in focus.

The EU's financial services chief said that the City of London may not find out if it will have access to the whole of the EU's market until after the end of the year, the Financial Times reported.

"The latest headlines on this topic warn that there may be delays to financial equivalence discussions, meaning possible delays for UK banks in securing pan EU market access rights," wrote ING strategists.

"There is still much uncertainty here and despite BoE's Haldane talking up UK recovery prospects, we still prefer EUR/GBP to be heading to the 0.91/92 area into September," they added.

The Bank of England's chief economist, Andy Haldane, wrote an op-ed in the Daily Mail on Saturday, saying that the UK's economy is on course for a rapid recovery from the coronavirus crisis due to strong consumer spending.

Haldane, who voted against expanding BoE stimulus in June, said that the central bank will continue to support the economy until recovery is well under way.

Elsewhere, British Trade Secretary Liz Truss said Britain would fight the United States' tariffs on Scotch whisky, writing in an op-ed in the Telegraph on Sunday.