G10 FX ROADMAP BY LLOYDS TSB

GBP: we see downside risk emerging into February but higher short-term yields support for now

Summary and changes vs. December

1. GBP: we see downside risk emerging into February but higher short-term yields support for now

2. USD: strength of Q4-10 GDP unlikely to be sustained in Q1 and so soft US yields/public deficit may stall dollar’s progress. Safe haven if Asian equity sell-off spreads

3. EUR: EU sovereign credit position still overshadows ECB inflation rhetoric

4. AUD: inflation spike may not persuade RBA; watch risk assets and China policy

5. Scandis: underpinned by fiscal balances and rising rate profile


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