Rabobank - "1. It is possible to argue that UK fundamentals have worsened in recent months. The lack of significant and sustained improvement in UK public finances has led to widespread speculation that 2013 will be the year when the UK loses its AAA status (...).
2. While UK fundamental are poor we would argue that the bigger impact for sterling in recent months has been the increase in confidence in EMU and the subsequently reversal of diversification trades out of the EUR. Although pullbacks are likely along the way, we expect that EUR/GBP will end the year back in the 0.88 – 0.89 area, where some congestion is likely.
3. On the back of our bearish USD view, we expect the pace of losses in cable to be tempered. We expect cable to push towards the 1.55 area on a 6 mth view."