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Trade of the Week: S&P threat heralds poor year for the pound

Currency traders could look to capture a predicted 5% fall in sterling against the dollar next year

Currency analysts this week predicted a weaker 2013 for sterling, with ratings agency Standard & Poor’s warning that missed targets on debt reduction have moved the UK closer to losing its AAA credit rating.

S&P announced after Thursday's market close that it was downgrading the UK's rating outlook to negative and warned that there was a "one-in-three chance" that it could lower its credit rating within the next two years.

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