Thursday 17th April 2008

In early trading yesterday the Euro soared against the USD after data showed a record 3.6 per cent rise in Euro Zone prices in March suggested to markets that the ECB will not be cutting rates anytime soon. The US dollar was also hit by news that there was a sharp fall in housing starts in March and such news will influence the Fed in continuing to cut rates.

The US continues its bias to the weak side as traders and investors will favour currencies whose yields are not seen as falling.

Still talk and rumours of CB intervention but as we have said before we would be surprised if there was a concerted move as such before the full extent of this global credit crunch is known and of course does the US want to participate in any such action?

For now though the Euro is king out there but we must continue to be very wary of events and news and trade the T/R breaks with discipline.