Investors Betting Against the British Pound Fear a Reversal

Some investors are betting that the biggest risk to the British pound isn’t that the turmoil around Brexit causes it to plunge further against the dollar, but that it stages an unexpected rally.

The pound was hovering at $1.2250 on Tuesday, just above its August low, according to FactSet. Still, sterling is down about 17% in value against the U.S. dollar since the Brexit referendum of June 2016. The currency is being weighed down in part by the fact that hedge funds and other speculative investors have the highest net short…

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