Synopsis:

Danske maintains a long GBP/USD position into year-end, driven by expectations of USD weakness amid a softening US growth outlook and bearish seasonal factors.

Key Points:

• US economic surprise index is positive but trending lower.
• Stretched net long USD positioning adds to downside risks.
• Bearish seasonal factors reinforce expectations of USD depreciation.
• Long GBP/USD position maintained from last week.

Conclusion:

Danske expects USD weakness to persist into year-end due to a deteriorating US growth outlook and stretched USD positioning, supporting their long GBP/USD trade.