INTERNATIONAL FINANCIAL OUTLOOK BY LLOYDS TSB

There are few notable changes to our foreign exchange forecasts since our last Outlook in December 2010. There are few notable changes to our foreign exchange forecasts since our last Outlook in December 2010. The most significant relates to the Japanese yen, where our end-2011 target for USD/JPY has been lowered to 95 from 107. This primarily reflects ongoing concerns about euro area stability, which should continue to underpin safe haven demand for the yen, and, a less hawkish interest rate profile for the US. However, our fundamental reasoning behind yen weakness remains intact and it could overshoot our expectations should global recovery take stronger hold.