Tuesday 20th May

The US dollar abruptly reversed losses in early NY trading as April leading indicators rose 0.1 per cent to match the March increase which had followed 5 straight months of declines. The data was seen as supporting the view that the US economic slump may be near a bottom and the Fed's easing cycle may be completed.

Focus now is on today's ZEW reports and late in the day the US PPI numbers and these will probably determine whether the Euro can indeed hold on to present levels or see a further decline.

However markets were warned yesterday by both Trichet and ace investor Warren Buffet that the end of the credit crunch is still not in sight and there will be rippling, secondary effects.

On a better note, the good old Aussie has recorded a fresh 24 year high after May RBA minutes showed a consideration of raising rates as inflation continues on the high side.