Sterling has emerged as the strongest performer among G10 currencies since the Makerfield by-election, according to Societe Generale. The currency's strength is attributed to a still sizable, though diminished, speculative short position supporting its gains.
Societe Generale highlighted that while speculative shorts remain significant, their reduction has helped underpin sterling's rally in recent trading sessions. This dynamic has positioned the British pound ahead of its G10 peers in terms of performance since the political event.
For Japanese investors, understanding sterling’s resilience is important as it may influence FX portfolio allocations and cross-currency strategies, especially given Japan’s close economic ties with the UK and ongoing global market volatility.