The pound may have some significant flaws that will hinder it in the months ahead but it is flexing its beer muscles today, willing to take on all comers. The barrage of selling that battered the pound at the end of 2008 is being reversed early in the new year, helped in part by the one-off EDF/British Energy deal which helped support the pound earlier this week. That flow also helped switch sentiment and remind dealers that the EU has many if not more of the same problems as the UK and is likely to cut rates again soon to boot.
Stops below the 0.8990 level have been triggered with a UK clearing bank leading the selling, market sources report. Cable reached 1.5280 before stalling, nearly a dime above where it ended 2008. Remarkable.
