The aftermath of the poor US data was meagre in the FX markets with Dollar longs going to be very disappointed at the lack of follow through. We’ve bounced smartly from the sovereign buying at 1.4355 to stand just below 1.4400. Cable has also bounced from the lows at 1.6930. Earlier the NIESR estimated that UK GDP fell by 0.4% in the three months to July. The think tank said it was hopeful that May will prove to be the trough of economic activity and that the pattern emerging supports our view that output is now stabilising and that in the abscence of further shocks, the period of sharp recession is over. They have been wrong before as in June they said they thought growth had returned in April.