GBP/USD Fundamental Outlook at 1500 GMT (EST + 0500)

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6050 level and was capped around the $1.6250 level.  Bank of England reported the U.K. financial system is significantly more stable and noted U.K. banks plan to increase business lending in 2010 after net business lending fell in October.  On the residential loan front, the central bank reported mortgages remain much weaker than before the credit crisis.  Data released in the U.K. today saw Q3 business investment growth decelerate to ­+0.6% q/q and GfK December consumer confidence worsened to -19 from -17 in November.  Additionally, CML November gross mortgage lending fell to a six-month low of ?12.0 billion in November.  Cable bids are cited around the US$ 1.5955 level.  The euro moved higher vis-à-vis the British pound as cable tested offers around the ?0.8955 level and was supported around the ?0.8855 level.