Good Morning,
The Dollar found a few buyers yesterday after a slide in oil prices and with Federal Reserve Chairman Ben Bernanke assuring investors that the Fed will keep assisting US financial markets as long as they remain frail.
Bernanke said the Fed was watching markets closely and may keep open the emergency lending facilities for big Wall Street firms, launched after the collapse of Bear Stearns, longer than initially planned.
Those remarks helped relieve investors who were rattled on Monday by a report that the top U.S. mortgage lenders, Fannie Mae and Freddie Mac might have to raise a combined $75 billion of capital due to upcoming accounting rule changes.
The Dollar also got a boost from a $10 retreat in oil prices from last week's record high near $146, providing some hope to investors worried about the corrosive impact of energy costs on faltering corporate profits and global growth.
EUR/USD has fallen back to 1.5650 from a high this week of 1.5740 but has since picked up a bit of support forcing EUR/GBP higher to 0.7976 ( GBP/EUR down to 1.2539)
Still awaiting some level of communique from G8 re Dollar and today also brings us a bunch of data to digest. Expect this volatile, undecided, market to continue with the Bank of England due to make a decision on interest rates tomorrow.
I expect them to remain at 5% and the market would tend to agree with that, but I'm still firmly of the opinion that without interest rate cuts our consumer led economy will continue to face grim days ahead for some time to come.
.Interbank update: 08.30 BST
Current Overnight
High Low
EUR/USD 1.5683 1.5725 1.5656
EUR/GBP 0.7970 0.7976 0.7950
GBP/EUR 1.2550 1.2574 1.2539
GBP/USD 1.9672 1.9743 1.9669
Today's Data: BST
09.30-UK-Trade Balance
10.00-EU-Eurozone GDP
10.30-UK-BRC Shop Price Index
12.00-US-MBA Mortgage Applications
Regards
Mike
MSP Foreign Exchange Services
Office: + 44 ( 0 ) 1732 700383
Mob: + 44 ( 0 ) 7887 581696
Email: mspfx@tiscali.co.uk
