Sterling shorts could see sharp unwinding on Brexit day

As the start of the negotiation process between the UK and EU approaches, an already weak sterling faces more tests

brexit-star
"We still see potential for further sterling weakness in the near term and after the triggering of Article 50" – Mikael Olai Milhøj

Sterling could see a sharp unwinding in short positions and a temporary spike on March 29, when Prime Minister Theresa May is set to formally initiate the UK’s exit from the European Union, even though the pound’s medium-term prospects remain gloomy, strategists say. While analysts point to persistent downside risks for the currency, they do not expect a huge move lower when the UK formally triggers Article 50, as market participants have already priced negatives into the pound. “One of the