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Sterling remains under pressure
By: Dukascopy - 21-12-2007
0votesPrevious session overview
Sterling remains under pressure to sell off against the dollar towards the 1.9621/51 June and August 2007 lows.Current slump in U.S. economic growth could mark start of fundamental shift in U.S. drivers, which may run through end of decade. U.S. 2004-07 consumer spending grew 3.0%-3.5% p.a, but likely to slow to around 2.5% p.a. over 2008-10 as households focus on repairing balance sheets to match lower home prices, weaker stock gains.
Look for EUR/USD to rally/post a minor correction higher ahead of further losses. the euro edged lower again Thursday, forming a new low for the month at 1.4308, and that, near term, a temporary low appears to be in place.
German Nov import prices up 0.7 pct vs oct; up 3.5 pct year-on-year.
The euro, recovering from its prior decline, is firm against the dollar on Friday.
On Thursday, investors dumped the U.K. pound and snapped up dollars as fears of more rate cuts by the Bank of England were compounded by economic data showing the U.K.'s current account deficit ballooned last quarter.
The New Zealand dollar again held to a tight range overnight.
US interest rates fell further as credit woes continued to hit the headlines.
The Japanese yen strengthened slightly against the dollar after the BOJ left rates unchanged as expected and reports that a U.S.
Market expectation
Many players are still interested in buying the euro, as the U.S. economic outlook remains uncertain.This week's heavy data calendar concludes today with September quarter GDP. Real GDP is expected to post a 0.6% annualized increase in the fourth quarter and 0.5% gain in the first quarter of 2008. And Core Personal Consumption Expenditure - Prices Index and Personal Income are also important events today.
Looking ahead, the Michigan sentiment survey will round up a data filled week for the US economy.
Today in UK important news : Retail Sales (MoM) (Nov) and Retail Sales (YoY) (Nov) . UK Retail Sales will end the week for a volatile pound in which markets are expecting a rise of 0.2% for the month of November.
Next Analysis: The dollar fell half a cent versus the EuroContent Provided by:
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