The dollar moved back down on Friday as Sterling clawed back some ground against all the majors on the back of news that the Bank Of England is set to inject some liquidity into the market as Bonds. The US continues to remain relatively weak as poor housing stats, job cuts and large sub prime writedowns continue to weigh heavily on the greenback. Despite this, those looking to buy Cable (GBP/USD) should be conscious of the current state of the Pound as the Credit Crunch in the UK appears to be orchestrating the movements of all its major crosses.

This week’s release of the B of E minutes should continue to allow the Dollar to gain against Sterling as more rate cuts are priced in. It is simply a case of whose economy is worse off, the not so great British pound or the not so mighty Dollar.

At present, the UK is losing the battle….