The British pound is still depressed by the publication of the northern rock. The publication shows how much the financial situation is serious and negative after the sub-prime mortgage problem impact and how it can prolong without such governmental actions versus these undiminished problems to support the crediting market.
The Japanese yen can keep gaining from the mistrust in the stock market, the risk aversion apatite amid the current negative sentiment of crediting problems and the increased expectations of a US recession which can spread out especially after the recent disappointing consuming sentiment US University of Michigan advanced figure of February which was the lowest since 1992 which can show a tightening outlook of the interest rate differential between the greenback and yen as it is not clear yet whether or not that we are to watch a close monetary easing in Japan too. In this same time the market is split between another .25% or.5% awaited interest rate cut from the next FOMC meeting.
The recent US inflation rates have reached the fastest pace in over two years last November and were mild last December as Dec Core CPI came as expected .2% m/m and 2.4% y/y and we are to closely watch the rate of Jan by the end of this week to know how far this can cap the current Fed's easing stance.
Best wishes
FX Consultant Walid Salah El Din Mob: +20 12 465 9143 E-Mail: snipped-for-privacy@fx-recommends.com