Thursday 8th May

The Euro continues its slide and overnight has recorded a 2 month low against the US dollar as a sharp drop in Euro Zone retail sales raised worries about the region's economic outlook and revived expectations for eventual rate cuts.

The ECB is expected to keep interest rates steady at 4 per cent later today and repeat its concern over inflation however mounting signs of slowing growth suggest the ECB may lower rates before the end of the year. Meanwhile the B of E is also expected to hold rates steady but in the face of a slowing economy and further credit tightening a 25bp reduction is expected in June.

Further rhetoric from Fed officials warning over inflationary pressures is also boosting the dollar's cause so we may well see further gains for the US currency.

We're staying with the model and trading the T/R breaks whilst continuing to implement … management!