Pound In Tight Ranges to Start Week with Downward Bias

The pound is mostly flat against EUR due partly to UK bank holiday, but lower to start the short week against the USD as a UK confidence report compiled by Lloyds Bank Corporate Markets showed that British companies’ optimism about the economy compared with three months earlier dropped to –3 from in July, when the gauge declined 17 points.  However, despite Bernanke’s speech on Friday where he said that the Fed would use all its tools available to stem any concersn about the world’s largest economy, but did not explicitly say that the Fed would engage in the next round of quantitative easing in the US.  Downward pressure still remains for the pound, as overnight we will see the release of the Gfk Consumer Confidence, which is expected to post another drop and thus reinforce the view that the UK recovery is faltering.