Dollar posts losses against majors on increase in risk appetite

US Dollar:
The dollar has seen a slide against the majors as risk appetite improved following the news on Friday that Greece has asked for its bailout loan from the EU/IMF to be activated. Players welcomed the move which saw Wall Street rally in late Friday trade and this has continued into Asian trading this morning. The normal relation¬ship between a gain in risk appetite and a decrease in the value of the greenback has played out in early morn¬ing trade. The dollar has now given up over a cent and a half on sterling from Fridays high of $1.53 and now trading at $1.5460 and the view seems to be for more dollar weakness to come. Even against a battered single currency, the dollar has given up ground with a similar move against the buck of over one and a half cent loss to see EUR/USD trade at $1.3370. This week we have the US interest rate decision due Wednesday where they are expected to keep interest rates unchanged at between 0—0.25%.
Data: Not a sausage.

Pound:
Sterling has rebounded this morning after last Friday’ mornings losses which were as a result of the release of GDP data which came in at a low 0.2% from an expected 0.4%. Cable has now recovered from this data to trade close to last weeks high of $1.5473, hitting $1.5460 this morning, helped by the continued increase in global risk in the financial markets. The pound has also gained over half a cent against the euro to trade over the 1.1550 level after falling under the 1.15 mark last week. Sterling is continuing to profit from the euros woes in the ongoing saga of debt levels reaching worrying levels, already seen in Greece but potentially moving to put the spotlight on other euro countries. Having said this, the noose around sterling’s neck continues to be the prospect of a hung parliament in the UK general election which is showing now signs of producing an outright winner as polls released daily have been showing. The view is that a hung parliament would not be able to agree on quick enough measures to reduce the UK’s worrying budget deficit, and lead to a potential downgrade of the coveted AAA credit rating which the UK enjoys.
No major data.


Euro:
The euros big news came on Friday when the EU/IMF was asked by Greece to activate a €45bn bailout to be approved. The single currency took a well earned breather from the thrashing it has taken over the last few weeks and moved higher against the pound and dollar. The single currency took over 1% off sterling to trade at 0.8716, but has now given up some of those gains this morning. The euro did manage to keep hold of gains made against the dollar, as a boost for the single currency on Friday from the Greek bailout plan and a gain in risk appetite saw EUR/USD rally from $1.32 to trade close to $1.34 this morning.
No data. Speakers 17.30: ECB President Trichet

General:
• Oil is continuing to rise this morning and has broken the $85 per barrel to trade around $85.50. This has come on the back of last weeks increase in new homes sales in the US coupled with hawkish talk from Bank of Canada that time may be coming to hike interest rates again. A fall in the value of the US dollar has also led to a move higher in oil.

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GBP/USD	1.5476
GBP/EUR	1.1563
EUR/USD	1.3390
GBP/JPY	145.82
GBP/AUD	1.6650
GBP/NZD	2.1485
GBP/ZAR	11.4084
GBP/CHF	1.6603
GBP/CAD	1.5446
GBP/SGD	2.1169
GBP/THB	49.80
GBP/HKD	12.0171 red-down; blue-up (snap shot)