Sterling caught in the middle

Sterling has suffered significantly from the UN divide on Iraq and associated domestic political pressure. The association of the UK with the US has meant any pressure on the dollar due to Iraq risks has also affected sterling. The reverse implication is that sterling is likely to hold up well versus a dollar recovery. In the near-term, much depends on the UK’s involvement in a military attack on Iraq as well as the position of the UN. However, any decline in war fears -- triggered by

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