Forex Flash: GBP longs undermined by BoE – Rabobank (Barcelona) - The sterling remains under pressure on Monday, recovering some ground after bottoming in the 1.5865 region, or two month lows, ahead of tomorrow’s inflation figures and the more important Letter of Inflation of the BoE.

In the view of Jane Foley, strategist at Rabobank, and according to the last IMM Net Positioning report, “subsequent news that the BoE has transferred GBP 35 bln of accumulated interest made on its QE gilts holding to the government has been taken as an easing in policy and is weighing further on the pound”, resulting in a substantial drop of GBP longs.