An increase in risk aversion resulted in strengthening of the dollar against most major currencies. The dollar benefited from safe haven flows yesterday as major equity markets slumped deep into the red on increasing fears about the ongoing financial turmoil. Sterling fell 3% against the dollar following Moody’s downgrade of Barclays and more gloomy economic data, and as investors brace themselves for another interest rate cut from the Bank of England.
There are several significant announcements taking place in the US today including MBA Mortgage Applications and the Import Price Index. In the UK, CBI Industrial Trends Survey data will be released at 11.00 GMT.
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