Sterling shorts cut back marginally, pound tumbled anyway - Socgen

Kit Juckes, economist at Societe General said, "The Pound just looks odd now"

Key Quotes:

"I don't know if next week's CFTC positioning data will make the latest sterling slide look sensible but the market was very short before the last lurch and relative rates don't justify a further fall at this point. The FX and rates markets have de-coupled somewhat, and gilts look more vulnerable here to me, than the pound."

"The Government's weekend public relations effort has seen talk of paying money to maintain access to some bits of the single market, while also supporting BOE Governor Carney. And yet, so far in early Asian trading, sterling is lower yet again. That doesn't often tell me much about what happens in the days ahead but beyond repeating firstly, that the risk of short-covering isn't negligible, secondly that we still think medium terms shorts against both Euro and Dollar will pay off and finally, that a fall in GBP/USD below 1.20 is dangerous in terms of what it does for broader confidence in sterling assets, I've got very little helpful to add."