UK CFTC data shows GBP non-commercial net positions at £-52.7K. The previous reading was £-58.4K.
The net short position narrowed by £5.7K. The figure remains below zero, meaning non-commercial traders still hold more short than long positions.
Speculative Positioning Turns Less Bearish
We’re seeing a notable shift in sentiment toward the British Pound, as large speculators are becoming less bearish. The net short position has shrunk to -52.7k contracts from a more pessimistic -58.4k. This indicates that traders are closing out their bets against the currency.
This change in positioning makes sense given the latest economic figures. The UK’s Q1 2026 GDP growth came in at a surprising 0.3%, avoiding the flat performance that was widely expected. March inflation also held steady at 2.8%, calming fears of a renewed price surge and adding a layer of stability.
As a result, we are adjusting our expectations for the Bank of England’s actions this year. The market is now pricing in a lower probability of an interest rate cut before the fourth quarter, a significant change from just a month ago. This makes holding the pound relatively more attractive.
We can see a similar dynamic when we look back at the market recovery in late 2025. After a period of extreme pessimism, a similar reduction in short positions preceded a steady rally in the GBP/USD exchange rate. The current setup is showing parallels to that previous turning point.
Derivatives Positioning Considerations
For those trading derivatives, this is a signal to reduce outright short exposure on the pound. It may be a good time to consider buying call options on GBP, as this provides a defined-risk way to position for a potential relief rally in the coming weeks.
