Since Monday, the British pound has fallen over 400 pips against the US dollar, making the GBP/USD one of the foreign exchange market’s most active currency pairs. Weaker CPI numbers were followed by dovish BoE minutes and now mixed economic reports have given pound traders more reason to sell the sterling. Annualized GDP for the third quarter was revised from 3.2 to 3.3 percent and mortgage approvals rebounded, but that was offset by the news that the current account deficit hit a record high while money supply growth slowed. Even though Prime Minister Gordon Brown insisted yesterday that the UK economy is fundamentally strong, price action in the markets indicate that traders do not believe him. The interest rate cut from the Bank of England earlier this month was not only the central bank’s first but it also marked the beginning of a new monetary cycle. Many traders believed that the last rate cut would be the one and only move from the central bank for a very long time but incoming data is beginning to suggest otherwise. Tomorrow we have UK retail sales. If that fails to inject new life in the British pound, we could be headed for 1.96.