The British pound struggled amidst dollar strength and news that Lloyds TSB, a major UK bank reported a 63 percent drop in income.
Like many other banks around the world, Lloyds has been hit by the credit crunch and slowdown in investment banking. We continue to believe that the UK economy is in bad shape and the pace of deterioration will accelerate. There was no economic data released this morning, but the GfK consumer confidence survey is due for release tonight. Rising food prices, falling house prices and problems in the labor market should weigh heavily on UK consumer confidence and the British pound. The only other piece of UK data due for release this week is PMI on Friday.
