Archived IMT (2010.04.07)

Escalating talk of a Chinese currency revaluation must not overshadow the possibility of a looming interest rate hike after the PBOC is expected to start issuing bills as long as 3-year maturities in a way to further drain liquidity. But it can also argued that such measures may reduce the need for other tightening measures such as raising rates and increasing reserve requirements. Elsewhere, UK march services PMI due at 8:30 GMT (9:30 London time) exp 58 from 58.4. GBPUSD upside may retest $1.53, but prolonged gains seen capped at $1.5340, while any disappointment in UK figures will recall the $1.5180 figure.