Archived IMT (2011.01.04)

STERLING IS THE TOP performer of the day after UK Dec manuf PMI hit 16 year highs at 48.3 from 57.5, lifting cable back above the $1.56 for the second day over the past 2 weeks. $1.5680 stands as the trendline resistance from the Nov 4 high. EURUSD adds to yesterdays gains, nearing further the key $1.3470 resistance 38% retracement of the decline from the Nov high to the Dec low. WE COULD SEE FURTHER USD LOSSES TODAY in reaction to this this afternoon's release of the Dec FOMC minutes, which will likely reveal the same dovish talk with the exception of Hoenigs hawkish dissent against QE2. But with Hoenig absent from the 2011 voting schedule (replaced by Minneapolis Fed Locharlakota) we may not necessarily see a dissent from the new rotated members in Q1. Clevelands Fed Pianalto replaced by dovish Evans of Chicago Fed. Dovish St Louis Feds Bullard will be replaced by Dallas Feds Fisher (extra hawkish in 2006-7 until he made a 180 degree turn as the crisis erupted in 2008). One hawkish addition, however, will be the return of Philadelphia Feds Plosser replacing Boston Feds Rosengren. Thus, we may see EURUSD testing 1.3470s and cable near 1.5670s, leaving us with USDJPY as the only likely positive pair for USD.