Archived IMT (2009.01.16)

Dollar drops across the board as the combination of falling inflation (lowest annual core CPI since 1954) and deteriorating industrial production justify the Feds zero interest rate policy, which is a double negative for the US currency. A third reason weighing on USD is the improvement in risk appetite, fuelling gold back above $830 after proving it could hold above the 2-month TL support of $805. I remain sceptical with the strength of the equities rally and the pullback of the USD. $1.3380 and $1.5050 in cable remain key obstacles for the day.