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Forex Flash: Will structural deficiencies in the UK damage the pound? – UBS

Very weak industrial production numbers on Tuesday have prompted further exasperation for sterling. With growth conditions everywhere else stabilizing, the UK seems the odd one out: defying cyclical tailwinds surely means the structural deficiencies in the economy are now becoming dominant.

“Coupled with the news that incoming BoE Governor Carney is talking to Treasury officials about the remit, likely to discuss 'kitchen-sinking' options, markets may now converge around the view that sterling is going to be permanently damaged.” notes Research Analyst Gareth Berry at UBS. It's not as if the world's oldest currency that is still in use will be consigned to history as the UK thinks about joining the euro. As investors continue to sit on short positions (and rightly so), perhaps it's time to explore some of the factors, which may start to turn things around.

Forex: USD/CHF breaks above 0.9500 level

The USD/CHF broke higher Wednesday, following a movement above the 0.9500 level during American trading. After peaking briefly at the 0.9525 level, the cross has surrendered some of its gains, retreating back towards the 0.9510/11 area in these moments. At this juncture the pair is recording steadfast gains of +0.39% above its opening.
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Eurogroup talks on Cyprus at Friday meeting might be unofficial

Eurozone Finance Ministers are expected to continue their negotiations on the rescue loan for Cyprus during the meeting scheduled for Friday, although some sources claim that these negotiations will be led on the sidelines of the main talks.
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