Archived IMT (2008.10.20)

Sterling has already reached the $1.71 target projected earlier for end of week. Interestingly, sterling's selloff is taking place despite accumulating gains in US stocks and a resulting bounce in yen crosses. Note how both GBP and EUR have lost ground against USD, while AUD and NZD have gained. Improved risk appetite is partly a consequence of Fed Chairman Bernanke's tacit support for additional fiscals stimulus. Nonetheless, GBP and EUR will struggle in waging any decent rebound as long as gold remaining below $800 per oz, and the UK data focus remains on the negative. UK retail sales and GDP are likely to redirect the burden on $1.6880 in cable.