It was a mixed bag of trading yesterday with unfortunately the pound coming off on the losing side for the most part. Sterling, the Norwegian krone and the Swedish krona all lost ground as liquidity dropped. This is of course after the Thanksgiving holiday and the problems out of Dubai. We think this short term imbalance may correct in the coming days but we are wary of the negative history that December and GBP have together.

The main news overnight has been the news that the RBA have once again hiked rates. They raised rates by 25bps to 3.75% and in doing so created a new record: the RBA had before today not raised rates in 3 consecutive meetings. Our view of AUD/USD at parity within 6 months is, we believe, supported by this data and therefore we see no reason to amend this.

Although we have no Bank of England meeting this week (it is instead next Thursday) we have all the prelim data we associate with Bank of England week. The important PMI figures, the supposed justification for a jump in UK GDP, are due from the manufacturing sector today with construction tomorrow and services on Thursday.

Data wise we also have US ISM manufacturing and pending home sales while unemployment from the EU is due at 10.00.

This is my last update before I leave for Kilimanjaro, and my colleague Rick will be taking over in my absence. Thank you to all of you have sponsored me so far. Follow the link here to read about Help 4 Heroes (the charity that I will be donating to) and to sponsor me. Thank you in advance for any donations. See you in 2 weeks!

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