Research Team at Lloyds Bank, suggests that the GBP has been under pressure at the start of the week as global credit market stress added to ongoing concerns over the EU referendum. Key Quotes “We don’t expect much of a positive boost for the GBP from this week’s UK economic data including the December trade balance on Tuesday and industrial production on Wednesday. However, we also note that short GBP positioning is now at fairly extreme levels with the latest reading from BNP Paribas Positioning Analysis metric indicating a score of -41 (on a scale of -50 to +50). A successful agreement between the UK and the EU at the February 18-19 summit would add some clarity on the timing of the referendum and allow PM Cameron to announce his support for the UK to remain in the EU. As EURGBP is trading at a premium relative to rate differentials this should allow for some sterling recovery. Accordingly, last week we proposed a one-month EURGBP put fly structure.” For more information, read our latest forex news.