Currency investors are benefiting as the pound suffers its worst fall against the dollar since 1971.

According to Barclays Stockbrokers, currency investors took advantage of the recent slide by trading heavily in GBP/USD (Sterling/US Dollar), with 70 per cent of all trades in this currency pair taking place over the 11 days that the pound was falling.

Foreign Exchange (FX) trading allows investors to gain returns from trading in the right direction. For example, by shorting the market and speculating that a currency will continue to fall against another currency.

While GBP/USD is the most popular currency pair, Barclays Stockbrokers has seen demand for FX trading surge as investors capitalise on this opportunity.

Henk Potts, equity strategist at Barclays Stockbrokers, says, ‘While commodity prices have been the main driver of FX movements in the last few days, fundamentals have also been at play.

‘A stream of gloomy economic reports weighed heavily on the pound, and heightened expectations of an early rate cut in the UK following the publication of the Bank of England’s inflation report, which spurred further declines in sterling.

‘Although we had expected some weakness in both the euro and sterling against the dollar, we had anticipated this to be more pronounced later in the year, and this correction has been fairly swift. We may see some consolidation around or slightly above current levels, given the size of the moves, although clearly the commodity markets will remain a key driver.’