Holding Short GBP/USD
We continue to hold our short GBP/USD position despite the pair sitting near technical support. Fundamentally, the Pound is a mess: declining industrial and manufacturing production; weak growth; deflation is a threat; unemployment remains high. The British economy is stagflating, and without a global turnaround, it is doubtful the Bank of England can engineer a recovery. Should the BOE print more Sterling to stimulate the economy - an announcement that could come as soon as tomorrow's January policy meeting - the Pound will come under further pressure. Currently, it is the worst performing major this year.
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