Is sterling heading for a fall?

In purchasing power parity (PPP) terms, cable has reached its most significant overvaluation since Black Monday in 1992. It might be premature to conclude sterling is heading for a similar fall, but some similarities suggest it will come under pressure. The ERM’s currency valuation in 1992 added to forces pushing the economy into recession. British corporate profitability was much weaker than that in the US, and the latest data shows these profits have diverged again. US corporate profits

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