Fundamentals

The British pound appreciated vis--vis the U.S. dollar today as cable tested offers around the US$ 1.7630 level and was supported around the $1.7330 level. Technically, todays intraday high was just above the 23.6% retracement of the move from US$ 2.0155 to $1.6790 level. Sterling has been bid for a couple of days on the U.K. governments plans to help manage the global credit crisis. Data released in the U.K. today saw September consumer price inflation rise 5.2% y/y, up from 4.7% from August. Many economists believe inflation will now begin a downward trend. Other data saw RICS house sales fall to their lowest level in 30 years with a further decline in house prices. The government reported U.K. house prices fell an annualized 3.4% in August. Additionally, BRC like-for-like retail sales values were off 1.5% y/y. Cable bids are cited around the $1.6635 level. The euro moved lower vis--vis the British pound as the single currency tested bids around the ₤0.7760 level and was capped around the ₤0.7830 level.