Late rally sees Sterling back to winning......>

FOREX: Late rally sees Sterling back to winning ways

-After a particularly subdued start to the session, price action picked up into

the London close with markets happy to sell the USD in favour of the EUR and GBP

as slipping US Treasury yields on money-market woes sapped some strength out of

the greenback.

-Data and headlines were few and far between, with a lot of focus resting on

still volatile money markets after overnight repo rates spiked to multi-year

highs. The market gyrations prompted intervention from the Fed via open market

repo operations for the first time since in ten years, which finally appeared to

settle market jitters. The move comes ahead of Wednesday's Fed decision which

will likely raise serious questions for the FOMC on whether the Fed are still

able to steer short-term lending rates in an effective manner.

-The FOMC decision is understandably the focus for markets Wednesday, although

Japanese trade balance, UK and Canadian inflation numbers as well as US housing

starts/building permits could draw focus. ECB's de Guindos and Villeroy are also

due to speak.