As we suggested earlier this week, the Pound is expected to remain in vogue because its economicrecovery is head and shoulders above other key economic zones. However, hints from the BOE’s Carney that UKrates might have to rise sooner rather than later, clearly puts the Pound in an exclusive group. The bias is up butwe are a little concerned about an eventual overvalued technical condition in the Pound in the face of soaringenergy prices, sluggish growth in the US and residual uncertainty flowing from Iraq. Pushed into the market wefavor the upside in the Pound but the risk and reward of getting freshly long the Pound at current levels isunappealing.
