Daily strategy 29-07-10 - Housing doubts to unsettle Sterling

29 July 2010 @ 04:01 pm EDT

Domestic economic doubts are liable to increase over the next few weeks with particular reservations over the housing sector following recent data. This will represent a growing threat to Sterling as recent optimism is liable to be mis-placed. Global risk trends will also be important for the UK currency and it will be difficult to extend the mood of optimism given the headwinds. Market confidence can remain firmer in the near term, but there looks to be a good selling opportunity close to 1.5650 against the dollar given the important threat of a deteriorating UK economy with a retreat to at least 1.5550.

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