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Sterling still under pressure...

Sterling still under pressure...Yesterday saw Brazil and New Zealand reduce interest rates; Brazil by a massive 150 basis points to 11.25% and New Zealand by 50 basis points to 3%. The Kiwi dollar gained on the signal from Central Bank Governor Alan Bollard that the pace of policy easing may slow and rates may not need to be pushed towards zero but may ease to 2%.In the UK Quantitative Easing commenced yesterday without too much drama with £2 billion successfully integrated into the economy, the markets will now be focusing on how the banks utilize the increased liquidity. At the moment sterling is still coming under pressure retracing back from 1.39 against the USD overnight through the 1.3820 support level and back into the mid 1.37 area. The year low of 1.3501 cannot be ruled out but sterling is hoping to find a base at 1.37 to claw back towards 1.40.Japans GDP came in better than expected at -3.2% which could be a factor to support the Yens strength over recent sessions; the Yen has pushed back from the brink of 100 against the USD to 95, it seems that its status as a safe haven option is returning.Later today we have US retail sales data, this is expected to show a drop to -0.5% from a previous of 1%. Switzerland are expected to cut their interest rates from 0.5% to 0.25% and also look at other stimulus options, possibly Quantitative Easing- this should see some weakening on the Swiss Franc.It seems the economic slowdown has taken its toll in every area, the Forbes magazine "rich list" lost 332 names and the equity downturn has led to billions being lost from the worlds richest…. something tells me though, that they will still weather the stormThe contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.


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