This was backed by the Chicago Mercantile Exchange, a proxy for hedge fund activity, which showed speculative investors putting positions on the dollar before August 12th.
Analysts are expecting the US dollar to hold firm with no deterrent if the US housing data released later today falls short. Due out today from the US is Build Permits, Housing Starts, and PPI Core and PPI, all expected to be lower than previous. The main event today will be when the FED official speaks at 15:00pm.
The Euro strengthened at the start of the session yesterday as oil reserves were threatened by storms in the Gulf of Mexico. After the miss in Mexico the Euro weakened against the majors. Due out today is the ZEW survey, and the German PPI, both expected to be lower.
The pound had another blow yesterday as the British Chamber of Commerce announced a "distinct possibility" of a UK recession next year. Also figures out from Rightmove of a 4.8% drop year on year in house prices didn’t help. Analysts are expecting the Pound to weaken further as they have commented that the UK economy is not equipped to diversify and are very dependant on the property market. The market is getting more and more convinced that the BoE will cut rates by the end of the year.