Archived IMT (2008.11.12)

Sterling breaks below $1.49 to reach the $1.4890 low of June 2002, which is also a major support, matching the cyclical low of May 1996 and June 1989. Sterling's damage is a result of UK-specific factors (BoE inflation report, rising unemployment and King's remarks) as well as overall assault on higher yielding currencies as US stocks deepen their selloff following Treas Secretary Paulson's remarks on curtailing the debt bailout to mortgage assets. A flurry of negative news on the earnings front is also accelerating the slide in equities. Buying USD and JPY against European and antipodean currencies remains the order of the day as equities have little to look ahead to, apart from Friday's ominous release of the October retail sales report.