Euro Pounds Brief Tuesday 30th January 2007

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Tuesday 30/01/2007

• UK house prices rose at the slowest pace in eight months
• The USD is a tad lower ahead of the start of the 2-day FOMC. The FOMC meeting will dominate market sentiment in the coming days!
• UK mortgage borrowing and new mortgage approvals rose in November
to their highest level in nearly three years. Borrowing reached £9.8bn
• Recent rate hikes are beginning to bite and could add to dovish rate expectations

US Dollar:

• Dollar hits 4-year high against yen: The dollar hit a four-year high against the yen on Monday as weak
economic data saw the prospects of a rise in Japanese interest rates recede.
• US OUTLOOK: From Goldman Sachs - "Our forecast remains that the Fed will cut the funds rate by 75bp this
year starting in June, and we think it's premature to change this. But it is conditional on our expectation that the
growth data will soften considerably in the spring while the inflation numbers remain benign.
• The main US data release is at 1500GMT, when consumer confidence is expected to rise to a reading
of 110.0 in January

Pound:

• Nationwide House Prices (Jan) 0.3% M/M vs 0.8% Exp. (Prev. 1.2%) and 9.3% Y/Y vs 10.0% Exp.
(Prev. 10.5%) (BBG)
• UK house prices rose at the slowest pace in eight months, suggesting three rate increases are starting
to cool the property market.
• (Bloomberg) -- The National Institute of Economic and Social Research raised
Euro: Figures out today:
• 00:00 GE CPI m/m Jan Prev 0.8 vs Exp 0.2
• 00:00 GE HICP m/m Jan Prev 0.9 vs Exp 0.2
• 09:00 EA Retail PMI Jan Prev 52.1
• 09:00 GE Retail PMI Jan Prev 55.2

General News:

• Saudi Official Says US Military Strike On Iran Would Be A Nightmare (RTRS)
• EU's Juncker Says Japan Economy Should Be Reflected In JPY Level, Now More Forceful On Japan Than
At Singapore
Meeting (RTRS)** Juncker's comments caused a downtick in both USD/JPY and EUR/JPY yesterday
evening.
• Saudi Envoy Says Crude Oil Stocks More Than Adequate To Meet Demand (RTRS)
• Oil prices are lower (back down around $54/brl) and this could underpin investor sentiment
• Also in the US today, late data sees the ABC News/Washington Post weekly survey of US consumer
sentiment, while the FOMC starts its two-day meeting, in Washington.

Interbank
Updated 30th January
GB POUNDS / US DOLLAR 1.9666
GB POUND / EURO 1.5173
EUR/USD 1.2957
GBP/JPY 239.67
GBP/AUD 2.5435
GBP/NZD 2.8230
GBP/ZAR 14.3732
GBP/CHF 2.4647
GBP/CAD 2.3266
GBP/SGD 3.0264
GBP/THB 67.338
GBP/HKD 15.3588