Cable has seen some recovery from its overnight low, but is still a long ways from where we left off in North America. We are presently at 1.6350 having hit a low around 1.6200 and having closed out in North America around 1.6690. Bank of England Governor Mervyn King served to undermine the pound in his speech in Leeds last night. He warned that the U.K.’s economy was probably entering its first recession in 16 years and that inflationary risks have shifted decisively to the downside. These comments have increased speculation that the Old Lady will soon be easing monetary policy. His comments regarding the pound were somewhat negative, Mr King stating “unless the falls in capital flows are replaced by other forms of external finance, the adjustment in the trade deficit and exchange rate will need to be larger and faster than would otherwise have occurred.” There is some talk the Bank of China as been a decent buyer in this latest recovery.