Tueday 13th May

Market expectations yesterday were for further gains for the US dollar but by the close European currencies and in particular the Euro had made some solid gains against the US currency.

Doubts as to whether the worst of the credit market turmoil continue to worry investors and ahead of US retail sales data and a continuing weak US economic outlook many of the short Euro positions of last week have been exited.

Meanwhile ECB member Quaden claimed yesterday that current levels of Euro Zone interest rates will not hinder economic growth. UK's April PPI figures showed a rise which gives the B of E a problem with rising inflationary pressures and slowing growth….stagflation. So no real Trend out there just for now and we will have to wait and see how the US economic data from both today and the remainder of the week comes in. Patience and Discipline!