Important events today:

12:30 UTC – US: Number of New Foundations Placed.

At the interbank lending market in London, the benchmark three-month Libor dollar rates have stabilized at 5.33%, while similar rates in the U.S. market are in the 5.25% area. The difference between the rates is only 0.08 p.p., indicating that there is no shortage of dollar liquidity and is negative for the U.S. currency.

The rates on the British currency, although gradually, but still growing on expectations of further tightening of the monetary policy of the Bank of England, and in this background it is reasonable to use the correction on the pound for buying. Additional support to the British currency may be provided by the oil market – the International Energy Agency (IEA) has provided a fresh release on the oil market, which pointed to the expectations of strong supply shortages starting from summer. According to the IEA, the current market pessimism contrasts sharply with a tighter market balance and the agency does not rule out a price rally.

Recommendations: Buy 1.2425/1.2390 and TP 1.2540.