US Dollar:
The dollar’s weak attempt at holding back the speculative selling tides would fail this week. Despite a brief respite in the form of congestion, EURUSD would eventually revive its month-long bull trend to overtake the closely-watched 1.40 level. On a trade-weighted basis, this blow would lead the dollar to the lowest level this year. To extend an already aggressive decline and plunge such remarkable lows requires a tremendously influ¬ential fundamental drive and that is just what we have gotten. The primary catalyst for the dollar’s deterioration to this point is the speculation surrounding the next Fed stimulus injection. Earlier this week, the Federal Open Market Committee released the minutes of their September policy meeting. The same cautious concerns were voiced but the tone was decidedly more dovish. The suggestion that many members deemed it necessary to increase support should unemployment not significantly improve or inflation close in on levels consistent with stable growth, suggested they had their benchmark for action. A further discussion of what was the best means to communicate further stimulus efforts and which was the best approach to increasing stimulus further sug¬gests a dwindling timetable. However, this could be said to be an oversaturated fundamental driver. Therefore, to further speculators’ distaste the market may now turn to the start of 3Q earnings.
DATA : PPI, Trade balance and unemployment claims
Pound:
Sterling hit a five-month low against the euro overnight.The pound was riding higher against the dollar Thursday, as the greenback came under intense selling pressure globally. Cable blasted through the $1.60 level and has set its sights on the 1.6050 mark. The dollar remains under pressure as the likelihood of more mone¬tary easing and low interest rates in the U.S. and upcoming elections pushed investors toward higher-yielding assets. Weakness in the UK economy has increased speculation that the Bank of England may need to pump more money in through quantitative easing. It was a good day for risk," said Mike Moran, senior foreign ex¬change strategist at Standard Chartered Bank in New York, referring to Wednesday's action. "You are seeing a big push as we move toward November, with the mid-term elections and (Group of 20 world leaders') meetings-¬-as well as the Federal Reserve — capable of providing legitimate sources of uncertainty
DATA : No major data to be released today
Euro:
The euro is trading at more than an 8-month high against the U.S. dollar on expectations the U.S. Federal Reserve may soon take new measures to support the American economy. The 16-nation euro hit $1.4093 in morning European trading, the highest level since the end of January. It retreated slightly later to $1.4071, up from $1.3959 the day before. In the meantime, the market is happy to ignore a 15-month high in euro Libor rates as liquidity drains and public strikes in France. Given this rousing display, it's almost as if the markets have for¬gotten how close the Euro was to total oblivion. It has since transpired that the likes of French President Sarkozy were genuinely worried that the currency might suffer death in the ring. More the point, though, the markets may be overlooking the risk that the Euro will succumb to the next onslaught.
DATA : No major data to be released today
General:
• The Australian dollar powered to new 28-year highs overnight to be within spitting distance from a mile¬stone parity level, helped by a strong domestic economy and renewed weakness in the U.S. dollar. The Australian dollar has been the outperformer in 2010 largely due to its strong trade links with Asia.
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| GBP/USD | 1.6038 |
| GBP/EUR | 1.1381 |
| EUR/USD | 1.4088 |
| GBP/JPY | 130.20. |
| GBP/AUD | 1.6068 |
| GBP/NZD | 2.0989 |
| GBP/ZAR | 10.88655 |
| GBP/CHF | 1.5255 |
| GBP/CAD | 1.6011 |
| GBP/SGD | 2.0730 |
| GBP/THB | 47.64 |
| GBP/HKD | 12.4416 red-down; blue-up (snap shot) |
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