Archived IMT (2009.01.27)

Germany's IFO business survey showed an unexpected in 2 of its 3 component indices in January, further extending the existing rally in European and antipodean currencies against the US dollar. Considering the IFO surveys historically effective track record in prompting sharp moves in the euro (up or down depending on the direction), we could see EURUSD prolong its advances to as high as $1.3475. The dollar losses could be intensified in the event the FOMC announces the purchase of long term US Treasuries at its meeting tomorrow. GBPUSD seen targetting $1.4350.