Foreign exchange markets are positioning for further sterling weakness ahead of the UK budget on Wednesday, with both hedge funds and asset managers continuing to sell the currency, according to Citigroup Inc.
The pound is currently trading near to its lowest level since mid-August, after tumbling from the highest in more than two years touched last month. While it’s still the best performing currency against the dollar year-to-date, the market’s confidence in the pound has been crumbling, after traders increased bets on Bank of England interest-rate cuts.