USD/GPB After the weekend...

[Sideways Tim]

Any guesses as to which way it will head? I have a circa $10K bill to pay and want to know whether to do it now or after the W/E.

RBOS nationalization is on the cards I fear, but what effect will that have?

[LD1Racing]

ADVFN said:

The Week Ahead

The global economy and financial-sector trends will remain key influences. As stresses increase, developments in currency policies will also become an even more important issue. Countries are likely to be increasingly reluctant to tolerate strong currencies with political pressure for depreciation. Official policy statements on exchange rates will, therefore tend to have an increasingly important influence on currency trends and valuations.

Key events for the forthcoming week

Wednesday January 28th 19.15 US FOMC interest rate decision
Friday January 30th 13.30 US GDP (Q4)

Dollar:

The US economic data is liable to remain very weak in the short-term with further downward pressure on consumer spending and industrial production. The Obama fiscal stimulus proposals will be watched closely with some optimism that the package will help stabilise conditions. The underlying debt burden will remain a serious barrier to a sustained improvement in growth and there will also be very serious fears over the budget implications. The dollar will gain some support on defensive grounds as risk appetite remains low on financial fears, but underlying fundamental weakness will make it very difficult to sustain gains.

The dollar retained a generally firm tone over the week and pushed to one-month highs beyond 1.28 against the Euro as European currencies weakened. The dollar continued to gain some defensive support as financial fears intensified.

The US economic data maintained a very weak tone. Jobless claims increased to 589,000 in the latest week from 527,000 previously which pushed claims back towards the 26-year highs seen during December.

Housing starts weakened further to a fresh 50-year low with an annualised rate of 0.55mn while permits were also at this depressed level. The industrial data remained bleak with a 2.0% decline in output for December after a revised 1.3% decline the previous month while capacity use also fell sharply to 73.6% from 75.2%.

The capital account data was significant as there were net long-term capital outflows of US$21.7bn in November following an outflow of US$0.4bn the previous month. Although overall inflows were positive, the weakness in long-term flows maintained underlying unease over the US structural financing position.

In congressional testimony, Treasury Secretary nominee Geithner stated that a strong dollar is in the national interest. He also stated that President Obama believes that China is a currency manipulator and called for a realignment of currencies which increased fears that exchange rates would become more politicised.

HTH

[Torque Matters]

The low of May 2001 was all that stood in between us and the mid 1980's...