Monday 7th April

The US delivered a very weak set of March payroll numbers last Friday and the US currency has done well not to have lost further ground over the last few trading sessions. Indeed the dollar is currently off Friday's lows as overnight in Tokyo the focus has been on fund allocation by Japanese investors at the start of a new business year.

Over the weekend Gulf Arab states agreed on fresh impetus for efforts to create a single currency by Y2010 and resist pressure to revalue currencies or drop their dollar pegs unilaterally to offset soaring inflation.

Little in the way of US economic data today so we will have to wait and see just where the market takes us in early trading.

We still maintain that this credit crunch and consequent US recession has very much further to run and with the Fed standing ready to provide more liquidity the USD downside is still the favoured direction.