Sterling shorts could see sharp unwinding on Brexit day

"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

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