(13:00 GMT)

The British Sterling continues to drop against major currencies after the bank of England revealed in its quarterly inflation report that inflation in UK would slow beneath 1% throughout the year 2009.

This was taken as further indication that the BOE will proceed slashing rates as we move into 2009.
As I mentioned yesterday, traders bet the difference in interest rate between the Euro and the Sterling will continue to widen, this in return formulates buying pressure on EURGBP which is now trading on a 12 year high above 0.82. ( it was trading around that level on 1996, years before the Euro was introduced to the public).

The GBPUSD is also trading on a 6 year low breaking under 1.5255, a level last seen on October 2002.
The next support area for GBPUSD is around 1.5150 , which was tested on August 02′, a level which may hold if reached within a week or so, the main support level is at 1.4838.
On the up side, the immediate resistance level of GBPUSD is at 1.5524.

The GBPJPY is also trading on the down side, after it lost 24% on its value since September 08′
Today it is trading just around 148.2 a major support area, a clear break of it might trigger some sharper selling, while a failure to cross 148 can send us back to 149.6
The next support area is at 137.4, and after it the main support at the all time low of 129.3 ( printed in 1995).