Archived IMT (2010.03.01)

We mentioned GBP in each of the our last 3 IMTs for a reason (Fri-Sat). sterlings collapse continues as GBPUSD drops 2.9% in a single day to $1.4784 (lowest since April), which is weighing on EURUSD. Lloyds bank latest losses (Friday); HSBCs eroding profits, renewed political doubts over a possible hung parliament in the wake of this years UK elections and the cusp of a double dip recession in the UK have led to massive cascading of stops in GBP. A renewed test of $1.4840s (61.8% retracement) remains in the cards, but rebounds could extend as high as $1.4970s especially as traders reposition ahead of this weeks busy econ calendar (ISM, PMIs ADP, Payrolls). USDCAD GDP next exp +0.4%; USDCAD eyes 1.0630 but support remains underpinned at 1.0470. Watch Feb US pers spending 13:30; Feb US ISM 15:00 See calendar http://www.ashraflaidi.com/economic-calendar/