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Sterling manages to hold the Dollar back

However comments made by MPC member David Blanch flower who pointed out to a deeper forecast on that the UK economy will keep on declining and rises in unemployment, soon made the GBP hit a 2 half year low against the USD with a low 1.7445 overnight. The Pound soon found some support though coming in the form of a weaker greenback after a larger than expected U.S Trade Deficit to rally back to 1.7605 during late NY trade.

The Euro came under pressure both from the sterling and the greenback as comments were made that Germany the biggest economy in the Euro zone is technically in recession. Jean-Claude Trichet, the ECB president, helped the Euro bounce back a little with his comments that "The ECB will do what ever that's need to protect prize stability". Overall the EUR/USD traded with a low of 1.3882 and a high of 1.4000 before closing the day at 1.3990in the New York session.

The USD gained for most of the trading day yesterday as commodities led by oil continued to weaken. Weak U.S data stalled the rally but it took comments from the ECB President Trichet to get the dollar rally back on track against the majors. US trade balance came in weaker at -62.2 Billon VS -58 Billon expected. Weekly jobless claim remained high at 445k.