(Bloomberg) -- The pound fell for the third day against the dollar to the lowest level in more than two weeks as a deepening slump in global equities rattled currency markets.
Sterling weakened versus almost all of its Group-of-10 peers after it was left more vulnerable to changes in sentiment following a recent buildup in bullish positions. The U.K. currency had rallied 5 percent in January, its best start to a year on record, after leveraged funds built up the largest long position since 2014 amid expectations of a smoother Brexit and a hawkish message from the Bank of England on Thursday.
“Pound longs were a market consensus trade,” said Jordan Rochester, a currency strategist at Nomura International Plc. “Even though the moves in forex have been more conservative than equities, it has some cross-market spillover and it's where there lies consensus positions that hurt the most.”
The pound fell as much as 0.9 percent to $1.3836, the weakest level since Jan. 18, before trading at $1.3873 as of 3:40 p.m. in London. It weakened 0.3 percent to 88.88 pence per euro, while the yield on U.K. 10-year government bonds fell four basis points to 1.52 percent.
To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.net.
To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net, Anil Varma
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