Sterling sapped -It's likely to be another....>

FOREX: Sterling sapped

-It's likely to be another volatile week for GBP, with the current political

fracas between the UK government and its opposition (in other parties but also,

increasingly, within the Conservative party themselves) seen extending well into

this week. As a result, GBP is better sold, falling against all others in G10

Monday. To make matters worse, manufacturing PMI data for the UK fell well below

expectations (47.4 vs. Exp. 48.4), pressuring GBP/USD to the day's lows of

$1.2093, just ahead of YTD lows at $1.2015.

-Elsewhere, the picture is far more mixed, with US Labor Day likely draining

volumes and market activity from the US crossover. NZD underperforms again,

keeping the recent downtrend in tact. NZD/USD's losses now amount to more than

7% from the July high. The USD index remains stronger after hitting a new cycle

high last Friday, sitting just below the 99.023 level as markets look ahead to

Powell's speech later this week.

-A scheduled speech from ECB's Rehn is the sole release on the economic

calendar, speaking in Helsinki at 1115BST.