(12:00 GMT - 05/12/07)
The growing doubt in the US economy is driven by the lower confidence in the economy as a result of the higher energy costs, the weakening dollar and the subprime mortgage crisis. US policy makers are now stepping up against the challenge putting effort to stem the spread of the subprime loan losses.

Investors are hesitant in taking big risks ahead of the monetary policy decision by key central banks including the ECB. The euro drifted lower against the US dollar as markets are looking forward to key interest rate decision by the European Central bank pushing the pair to the upside to record a high of 1.4770 and a low of 1.4698.

The Bank of England is observing the signs that sure indicate that the credit conditions are slowing economic growth as the property markets are dropping in the UK. Not to mention, the signs are getting clearer by the day showing that the slowdown in the housing market is gathering pace. Part of the decline in the Pound we witness now comes from the Unwinding of carry trades which is taking place at this hour pushing the pair to record a high of 2.0585 and a low of 2.0354.

The Yen is gaining against the US dollar and other majors as unwinding of carry trades takes over pushing the pair to the downside; recording a high of 110.68 and a low of 109.76.

The US dollar is sinking badly this time and nothing seems able to save it. Though unwinding of carry trades today is seen benefiting the dollar, yet we will soon see changes and things will go back to as they were; where the dollar is the biggest loser. A few important data are coming out today from the US economy where analysts are pretty sure that no major change will occur and the dollar will continue to suffer.