The British pound has faced difficulties today to catch up with the single currency progress versus the greenback which has been supported today by the equities market falling and the fading of the investors' risk appetite momentum. The cable has fallen below 1.65 after an unchanged retail sales rate of September from August while the market was waiting for a rising by .5% m/m. so the yearly rate was below the market median expectations of 2.7% at 2.4% from 2.1% in August.

The greenback has started the day strongly bringing the single currency back down below 1.50 and the cable below 1.66 with stocks selling wave started by the closing of the US session yesterday but it is coming under pressure currently with the Dow trying to get into the green territory after better than expected figure of the US leading indicator of Sep up by 1% m/m ad the market was waiting for .9% from just .4% in August showing a continuousness of the improving pace of the US economy currently after a dovish opening today if this sentiment can stay longer, this can help the single currency which is still finding buying at its bottoms to close the day above 1.50 again versus the greenback which is suffering a dovish market sentiment because of its weak interest rate outlook in the face of the inflation building up with the commodities and energy prices rising.

By God's will, we are still waiting later this week for the release of UK GDP preliminary reading of the third quarter tomorrow which is waited to be down by 4.6% y/y after declining of the second quarter by 5.5% and from the Euro zone, the germane IFO release of October which is expected to get better to 92 from 91.3 in September.

Best wishes

FX Consultant

Walid Salah El Din