I closed out this trade this morning for a small loss (c. 0.2 risk units). I still expect the GBP to weaken as more QE is brought in to offset the effects of the government’s fiscal contraction. But with commodity prices potentially beginning a good pullback, I am worried about being long the NZD, and the UK government’s announcement on fiscal retrenchment this afternoon has the potential to disappoint the market (a lot has been leaked but there is no reason to think the market has noticed; markets don’t get politics). So I didn’t have conviction in this trade, and that is a good reason to get out.

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