The trend of a strong bearish dollar is still valid, as it weakens to ranges among record lows, the bleak testimony from Federal Chairman yesterday, that is to continue today was no near to support the dollar as clearly they are to discard inflation as of this time and concentrate on growth, that means one thing, economic problems are escalating on US ground as this is their mere confession of recessionary fears, and even at this rate stagflation fears, which is added upside pressure to dollar denominated assets especially gold and oil!

The single currency has now proven to be the strongest among industrial majors, as expectations of lower rates in the EU has been prolonged and taken off the table, and Mr. Trichet keeps growing in the eye of all market participants, especially after the heart's data today, Germany, came well above expectations, proving that the Euro area's fundamentals are sound. The Euro took the dollar to its historic lows and now is consolidating trade in higher ranges as it did not just breach the psychological barrier yet its now building the base trading today in tight ranges acquiring momentum to pursue the set $1.52 targets, the highest was left intact at its Asian levels of 1.5121 while the lowest was of 1.5073. Meanwhile the euro maintained its glamour against the pound as well as the pair did not breach down 0.7612 while setting the highest of 0.7635.

The pound remains hammered, as after the rumors yesterday that affected the bullish sentiment of a troubled UK clearer set the tone weak, while adding to concerns that the EU is till now resilient to US slowing tides means the impact on UK is to enlarge; sterling continues to decline against the dollar especially since yesterday it weakened well against the euro and the yen. Against the dollar it managed to breach down the 1.98s to set as low as 1.9761 the area which offers good demand on the pair, leaving its intraday high at early trade of 1.9847. Meanwhile the GBP/JPY is still traded in low ranges pivoting 210.70s setting the lowest at 210.16 to rebound then now trading near 211s.

Japan's currency, the Yen, is now consolidating within the 106s after failed to attempt breaching up 106.60s and still held by the minor support at 106.16s above the strong levels that the low was set at yesterday near 105.90s. The yen is still gaining on the back of a very fragile dollar, while risk appetite has little now on the yen as the its weaker than the dollar.