Thursday 27th March

Further weak US economic numbers and robust German IFO numbers has see the Euro continue to make gains and with a high of $1.5858 the single currency has recorded yet another fresh high against the beleaguered US currency. So far the Euro Zone and German economies continue to weather the economic troubles that are plaguing the US. Bank of England officials yesterday warned that the risk to Sterling is to the downside but even that could not stop the currency from rising on the day against the weak dollar although we would point out that Sterling still remains the weakest of the majors against the USD as shown by the proximity of its T/R level.

Banks throughout the western world remain suspicious of each other and such suspicion makes them reluctant to lend thus intensifying the credit crunch problem. Until this is resolved we expect further pressure on the US dollar.