ING: Pound's Short-Term Rally Unlikely to Last, Euro Rebound Expected Soon

Golden Ten Data reported on March 5 that Chris Turner from ING Group pointed out in a report that the recent strength of the pound against the euro reflects a repositioning, but its rally is unlikely to be sustained. He stated that asset management companies currently hold significant net short positions in the pound, betting that the pound will decline. At the same time, they also hold long positions in the euro, expecting the euro to rise. The market has already lowered its expectations for a rate cut by the Bank of England, which provides further support for the pound. Although ING Group currently expects the Bank of England to cut rates in April rather than March, it still anticipates two rate cuts this year. Turner believes this will push the euro-pound exchange rate back above 0.88 pounds.