After looking through the overnight headline flow we didn’t need to look at a chart of the Pound to knowit was going to be under significant liquidation pressure. We think the Pound was priced for perfection around the1.70 highs and given the broad based global macro-economic let down of late, a return to 1.6640 might bepossible. Clearly hawkish statements from the BOE suggesting higher rates next year to check a surging realestate sector, is partly behind the washout, but the Pound is also showing its disappointment over the softening ofglobal economic expectations.
