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Sterling is Doomed by Inflation

Mon, Jul 13 2009, 12:16 GMT
by Tauane Sousa

Tamley Global Markets


  • FX Market focus on US Q2 reporting season
  • United Kingdom economy deteriorates

Forex markets have been stable through the Asian session. Markets have become increasingly cautious as the US Q2 reporting season is approaching. This probably will be a dominant subject in the week ahead, and markets will be also looking into top tier reports, especially from US this week for a direction.
The Sterling has suffered major damages as the UK economy will likely to hit its largest contraction on record. The UK inflation has been relatively high but Tuesday’s data should show an easing in the CPI rate back down below the Bank of England' 2% target level. Meanwhile, figures on Wednesday are expected to show a further deterioration in UK labor market conditions.


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