Trading was thin on the ground yesterday as US markets were closed for President’s Day. The dollar rose against the pound on the back of risk aversion which caused investors to flock to the safe haven of the dollar. Additionally Japan announced on Monday that growth had fallen by more than 3% in the last three months of 2008, the worst result in 35 years. The pound remained weak predominantly due to the fact that the G7 meeting failed to refer to it at the weekend. It is also expected that sterling will weaken further today in anticipation of a report due out which is expected to show a slowdown in inflation in the current bleak economic situation.
There are several significant announcements taking place in the US today including the NY Empire State Manufacturing Index, TIC Flows and the NAHB Housing Market Index. In the UK, Consumer Price Index, House Price Index and Retail Price Index data will be released at 09.30 GMT.
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