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IMS FX MORNING REPORT for Wednesday 8th December 2010

Today's Interbank rates -

POUNDS TO US DOLLARS 1.5716
POUNDS TO EUROS 1.1896
POUNDS TO AUSTRALIAN DOLLARS 1.6045

EUROS TO US DOLLARS 1.3211
EUROS TO POUNDS 0.8406
EUROS TO AUSTRALIAN DOLLARS 1.3487

POUND HEADLINES:

• In the UK, the CBI Industrial trends survey is expected
  to show an improvement in the total orders balance to -10 (consensus -13) in
  December from -15. The latest manufacturing PMI was surprisingly strong,
  boosted by a jump in new orders component in particular, but also by
  stronger output and employment growth.
• Other than yen, sterling is more than 10% below its fair
  value against CAD, EUR, NZD and CHF. The misvaluation against the Kiwi
  dollar is the largest at 14%.
• The UKs manufacturing output grew by 0.6% in October, the
  fastest pace since March. The growth was twice as fast as analysts had
  expected, and the figure comes a day after an industry body said the sector
  was "powering ahead".

EURO HEADLINES:

• Germany data today are expected to confirm the country's
  considerable economic momentum at present, with signs that the traditionally
  strong areas of production & export are leading to a revival in domestic
  demand. German industrial numbers are also due.
• EU banks will have to face a second, tougher round of
  stress tests from February next year. The new tests will be more rigorous
  and even more comprehensive.
• The toughest budget in the Republic of Irelands history
  has narrowly passed its first parliamentary vote. It came after finance
  minister Brian Lenihan laid out government plans for a shake-up of the
  income tax system and hefty benefit cuts in his 2011 budget.

US DOLLAR HEADLINES:

• Some 58% of Americans expect the US housing market to
  stay depressed for two or more years. The findings by property websites
  Trulia and Realty Trac come as house prices have begun falling again.
• A quiet day ahead in the US calendar, but tomorrow we
  have US Trade balance and Uni of Michigan confidence survey.
• The pound neared a two-week high against the US dollar
  yesterday as an improved risk environment, led by stronger equities, dulled
  demand for the safe-haven.

If you need to buy, sell or make an international payment today then please
call me for a free quote.

Kris Charalambides

FX Broker

kris@imsfx.co.uk

www.imsfx.co.uk

Tel: 0207 183 2790