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Traders Says UK Inflation Risks Undoing Aggressive Rate-Cut Bets
Bets that the Bank of England is getting closer to lowering UK interest rates are misguided, according to bullish pound traders, who say a key inflation reading next week could spur a rally in the currency. Sterling ended the week at its lowest level against the euro since May after BOE Chief Economist Huw Pill fanned speculation of interest-rate cuts next year. Strategists at Credit Agricole SA and Bank of America Corp. say those wagers are overstretched setting the pound up to rally as they unwind. While Wednesday’s headline inflation print is forecast to fall significantly, it’s largely due to energy prices. ... (full story)