Tuesday 10th March 2008
US dollar steady and off its lows against the Euro although currently hovering near an 8 year low against the Yen as fresh signs of deterioration in credit markets hits global shares once again and triggers the unwinding of carry trades. Hurt by write downs of US subprime mortgages and related securities banks are increasingly reluctant to extend credit to investors such as hedge funds thus triggering a cycle of margin calls and forced selling across many markets.
Data yesterday showed that Germany's exports increased to a record high in January despite the strength of the Euro. ECB's Trichet upped the 'verbal intervention' ante yesterday as he warned of 'excessive exchange rate moves'.
But speculation that the Fed might lower rates before the March 18th meet kept pressure on the USD and although momentum has slowed the negative Trend is still very much intact.