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Dollar seems to be king

The US released some poor numbers again with house prices showing a drop of 13% on the corresponding month last year and consumer confidence falling from 65.9 to 62.3 for April. The market looks to have already priced in a 0.25% drop in the US rates tonight and all ears will be listening to comments after to see if there is any signs that they are nearing the end of the rate cut cycle.

The US data was largely ignored as dealers reacted more on the negative data and comments out of the Eurozone and the UK. The Eurozone Retail PMI number came in lower than predictions and shows that the Euro growth has slowed dramatically since the first quarter. Sterling was hit by comments from Mervyn King and Mr Blanchflower a member of the the BOE committee as to regards the state of the UK economy. The recent poor data and dovish comments by the officials painted a bad picture of the current state of the UK economy.

There is a lot of data due before the US rate decision tonight. Firstly in the UK we have already had Nationwide House price survey confirm the poor state of the UK house market. Later this morning in the UK we have the GFK index due at 10.30 UK time.

Before that in Europe we have German unemployment due along with business, economic and consumer sentiment due for the Eurozone as a whole. Also around 1.00 UK time we have Mr Trichet speaking.

This afternoon before the rate decision, we have out of the US their GDP figures which are expected to show no growth for the first part of the year and a lower predicition for the Chicago PMI figure.