httpvh://www.youtube.com/watch?v=2yrQEIRswIk

The dollar continued to strengthen against the pound yesterday with an intraday low overnight of 1.6031. As we warned yesterday we believe that the pair will fall through the 1.60 level as investors jump into the dollar for haven security.

The dollar also rose yesterday against the euro, rand and the commodity currencies.

The other main pull on FX markets yesterday, and likely to continue throughout the week, was profit taking. Pound slinked lower against the euro as investors cut positions after its recent gains. We do see GBPEUR higher by the end of the week however, possibly over the 1.13 level.

The market is a generous soul and as such keeps depositing data shaped presents in the laps of the world’s economists. Today’s stocking fillers include the final Q3 GDP reading for Q3. The previous reading was -0.3% with the market expecting it to uptick to -0.1% today. As with all things if we see a better than expected figure then we would expect GBP to rise and vice versa.

We also have inflation and GDP figures from the US at 13.30 and existing home sales and Richmond  Fed manufacturing PMI at 15.00.

German GFK consumer confidence has just been released and was slightly worse than expected: 3.3 vs. 3.6.

You can also follow us live on Twitter at http://twitter.com/World_First