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Rate continues to recover, snapping a......>

STERLING
STERLING: Rate continues to recover, snapping a pretty long losing streak and
topping out at $1.2250 as markets cover profitable shorts and position ahead of
the Fed. GBP is comfortably the strongest performer in G10 Wednesday, which has
fed well into both hedging and futures volumes.
-Further downside protection remains in demand for GBP, with put strikes at
$1.1335, $1.21 and $1.22 most firmly in demand. One of the larger trades to
cross today is particularly bearish: consistent with a Gbp221/149mln
1.1335/1.1440 put spread rolling off in mid-September.
-GBP/USD rally today is also bringing the spot rate back into range of some of
the biggest expiries in GBP markets rolling off this week: $1.2425(Gbp544mln)
and $1.2475(Gbp677mln) both expire on Friday.

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