BLBG: RBC Says Pound Gains May Prompt ‘Short Squeeze’ Against Loonie
By Daniel Tilles
April 1 (Bloomberg) -- Pound strength may prompt traders who bet sterling will decline to end their trades, sending the U.K. currency higher, RBC Capital Markets said.
“Given the weight of speculative shorts in the pound, a record as of March 23, the risk of a nastier short squeeze cannot be ruled out,” Sue Trinh, a senior currency strategist in Hong Kong, wrote today in a report. “We identify pound- Canadian dollar and pound-Australian dollar shorts in particular as among the more vulnerable pound crosses should sterling continue grinding higher.”
The pound slipped 0.2 percent versus the Canadian dollar, known as the loonie, and rose 0.2 percent against Australia’s currency, nicknamed the Aussie, as of 8:22 a.m. in London.
Sterling also gained 0.2 percent to $1.5208.
To contact the reporter on this story: Daniel Tilles in London at dtilles@bloomberg.net
