Sterling enjoyed an upwards tilt yesterday as reports of government interference in the UK banking sector saw sentiment lift in GBP. The reports state that High St banks would be forced to open their loan book to government inspectors so as to show that a decent amount of lending is taking place and that money is not being hoarded in order to strengthen balance sheets. This could in turn to lead foreign branches of UK banks to repatriate funds and in effect bolster GBP.

Sentiment may be drifting into sterling over the coming months at the behest of dollar analysts speculated yesterday. With the explosion of the Fed’s balance sheet and the flood of new money that will be printed to fund the latest rescue plan simple economics would show a falling dollar although we believe this uptrend may run out of steam very soon and would be looking for a break below 1.50 next week; a close above 1.56 would cause us to revisit this however.

Given the Thanksgiving holiday the data schedule also slumped into a trytophan induced coma and the leftovers that we will be picking at today include Gfk Consumer Confidence and preliminary CPI from the EU.

Have a great weekend.

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