Archived IMT (2009.01.20)

Cable drops to fresh 7-year lows below $1.4150, while EURUSD dips to the $1.3020 target as Asian markets pick up the losses where European markets left off on Monday. But the latest bout of risk aversion is concentrated in the European currencies, rather than commodities FX as USDJPY remains supported above 90 and gold attempts to hold above $830. Sterling bears await fresh selling ahead of the morning's CPI figures, which may be expected to drop below 2.5%, thus paving the way for zero interest rates in the midst of second gvt bailout.