Euro Pounds Currency Brief December 2007

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Monday 31st December 2007 Interbank
GB POUNDS / EURO  1.3559


Loans approved by UK banks down 43% against last year

Euro continues relentless rise on technicals


Pounds:

The pound again fell away on Friday on a generally negative trend rather than any real macroeconomic data. Apart from a brief rally on cable sterling remained offered.

Mortgage approvals in the UK are showing a 46% drop off from last year showing a definite slowdown in the UK housing sector. Prices have risen by 179% in the last 10 years however there is a very real chance that prices will stagnate or perhaps even turn negative in the coming year if credit conditions remain how they are.

There are no figures form the UK today and the futures markets close at lunchtime so we should be in for a very quiet day.


Euros:


The euro continued on marching higher on Friday on carry trade play and confidence in the single currency.

Euro-dollar broke 1.47 with ease which is a moderate surprise given the resistance/support it provided last time out. Euro against sterling is now under 1.36 which is a marked fall away form the 1.50’s we saw earlier this year.

No figures out in Europe today.


General Euro Currency News:

• The Pakistan rupee is under serious pressure at the moment with the ongoing political uncertainty left by the death of PPP leader Benazir Bhutto. Her 19 year old son has been appointed joint leader which has cast doubt on the timing of the upcoming elections.

• Oil is currently unchanged however there is plenty of open interest on the buy side following the situation in Pakistan. At the moment $100 is a ‘when not an if’. Oil this morning is trading $90.25.

 

Monday 24th December 2007 Interbank
GB POUNDS / EURO  1.3765


UK expected to cut rates 4 times next year
Consumption a concern rather than inflation in the UK
UK expected to see lowest growth rate since 1992


Pounds:

THE Bank of England is likely to slash interest rates four times next year in response to a sharp slowdown in growth, economists say. The first cut could come as early as next month, analysts believe, following the monetary policy committee’s unanimous decision to cut Bank rate from 5.75% to 5.5% this month. Four cuts would take the rate to 4.5%, the level at which the Bank started to raise rates in August last year. “So far only the housing and financial markets have weakened significantly as a result of the credit crunch. However, in the new year we expect the flow of negative economic data to become more pervasive — supporting further action by the Bank.” Alan Clarke, UK economist at BNP Paribas, said the weakness in the economy he expects just 1.6% growth in 2008, the lowest rate since 1992 would force the Bank’s hand. This news and view is not helping the strength of the pound.

We are likely to remain low against the Euro.


Euros:

The ECB will not be in a hurry to follow suit and cut interest rates in line with the US and UK according to its President, Jean-Claude Trichet. Keeping a tight lid on Eurozone inflation will be the key focus for his Bank. In an interview with the FT when referring to his central Bank counterparts he said, “Other colleagues are in a different situation”. While the ECB has been proactive in trying to improve credit conditions through injections of liquidity into the market, it perhaps sees this as a separate issue and with inflation currently at 3.1 per cent


General Euro Currency News:

• New ANC leader Zuma looks likely to be charged with corruption which can only spell bad news for the • Rand.

• Oil is virtually unchanged with very little moving the market in the run up to Xmas. We are currently • $90.23.

 

Friday 21st December 2007 Interbank
GB POUNDS / EURO  1.3799


UK continues to fall along with rate cut calls
UK Retail Sales to rise


Pounds:

The pound continued to fall yesterday suffering the after effects of the 9-0 minutes and very dovish comments from the MPC.

Cable fell below 1.99 yesterday continuing the rapid fall from grace. Pay deals in the UK this year were well below last year’s numbers which will comfort the MPC as less money mean less inflation.

UK profit warnings are spinning about in the press which is generally a bad signal for the headline index. Ernst & Young have issued now 46 profit warnings, up 53% on 2006 mainly on the larger high street retailers.

Retail Sales are forecast to drop today.


Euros:


In the last 24 hours we have heard plenty of ECB members following a considerable period of silence and this time they have the inflation drum out to bang again. Gozalez-Paramo, Constancio and Trichet have ll said the ECB will do all it can to combat inflation in the face of rising commodity prices.

Eurozone current account data is due out today.


General Euro Currency News:

• New ANC leader Zuma looks likely to be charged with corruption which can only spell bad news for the • Rand.

• Oil is virtually unchanged with very little moving the market in the run up to Xmas. We are currently • $90.23.

 

Thursday 20th December 2007 Interbank
GB POUNDS / EURO  1.3880


Unanimous MPC vote for rate cut
Jan UK rate cut seen on particularly dovish minutes


Pounds:

The pound took a pasting yesterday as the MPC minutes showed that all 9 members voted for an immediate 0.25% rate cut in an effort to ease the current banking problems. In addition the minutes were particularly dovish with the bank’s suggestion that ‘a substantial loosening in policy might be needed’ which suggests the next rate cut could be as soon as January.

At the moment the futures markets have 2 cuts priced in for next year however the banks minutes could see more cuts than that.

Cable dipped below 2.00 and the pound suffered against other currencies.

Today we have UK GDP for Q3, public sector funding and mortgage approvals to look at.


Euros:


Germany’s Finance Ministry downgraded the nations 2008 growth. The upswing should continue through the year but downside pressures from the States are beginning to materialise in the economy and growth should slow. Also yesterday German IFO numbers were poor adding to concerns that the largest economy in the Eurozone is indeed slowing.

Not much to look at today with Italian Retail Sales the highlight of the releases.


General Euro Currency News:

• The Bank of Japan last night opted to keep rates on hold however said that the bank will raise rates gradually when needed.

• Morgan Stanley yesterday joined the list of banks with large write-downs. The bank wrote down $9.4bn however announced a deal with a Chinese group worth $5bn.

• Oil rallied slightly on the back of US inventory data with stocks showing a moderate fall figures showed yesterday. Oil is now $90.25.

 

Wednesday 19th December 2007 Interbank
GB POUNDS / EURO  1.4011


UK CPI comes in under forecast


Pounds:

Yesterday the core CPI figure came out under expectation at 2.1% with the markets looking for a rise to 2.2%. This has lead to large press speculation that rates may be cut again in January however more of a perspective will be gained from the minutes of the December MPC meeting when they are released at 0930GMT this morning. The overriding view is that there will be a 7-2 vote in favour of the cut however the danger appears to lie with a 6-3 or 5-4 vote. A January cut would seem to smack of panic slightly from what could be considered to be a conservative central bank. MPC member Kate Barker yesterday acknowledged that inflation expectations had risen however the key to the rate cut was the worsening in the credit markets.

The pound was slightly down on the day following the inflation release yesterday.


Euros:


Yesterday the ECB held an auction to inject an incredible $500bn into markets in the period up to the end of 2007. 390 financial institutions bid between 4 and 4.45% for EUR equivalent of 377bn to try and resolve the year end liquidity problems. This is a massive operation by the central bank and dwarves the 10bn and 20bn injected by the BOE and Fed yesterday.

German IFO this morning is forecast to fall which may pressure the euro.


General Euro Currency News:

• The ANC leadership elections have been decided and Jacob Zuma won. He is now favourite to take over from Mbeki in 2009. The Rand as a resukt has seen some large volatility and will continue to do so before the leadership of the country is decided.

• Bradford & Bingley have approached struggling Northern Rock with a view to buying some of the firms assets.

• Oil remains supported ahead of the US inventory data released this afternoon. With stocks expected to drop a bid should remain in place today. Oil is now $90.25.

• The charting server went down at 2100 last night so prices on chart since are false.
 

 

Tuesday 18th December 2007 Interbank
GB POUNDS / EURO  1.4032


UK CPI forecast to rise again.


Pounds:


Quite a big day for the UK today with both CPI and RPI set for release later on this morning. CPI is set to rise again to 2.2% which is again above the MPC target of 2.0% and with rising consumer expectations this figure will not please the MPC.

Consumer energy prices are to rise with reports that new customers could be paying up to 10-15% more in the new year adding to inflationary pressures.
The data should throw the MPC into a bit of a pickle particularly following their decision to cut rates this month given that their remit is to keep inflation under 2%, not to bail out institutions.

In a report in today’s Telegraph Edmund Conway puts the chances of a UK recession at 50:50 citing a housing slump and a fallout from the credit crunch. CPI due at 0930GMT.


Euros:


The ECB seem to have had enough of the current liquidity problems in the market announcing that today it would offer unlimited funds at below market interest rates to try and stop a year-end liquidity crunch-up.
This move comes on top of last weeks barrage of cash from the big central banks aimed at trying to free up money through the markets. The European trade balance is the only figure today.


General Euro Currency News:

• The minutes from the Reserve Bank of Australia’s meeting in December said that there was a ‘strong case’ for further rate hikes however market sentiment had deteriorated rapidly with the credit problems towards the end of this year.

• NZ business confidence falls to-24.9 from –19.6.

• Oil prices remained fairly flat however downside pressure remains from the worry that demand could fall if economic confidence and growth fall. The expectations of a fall in inventories kept a modicum of support with oil now trading at $90.79.

 

 

Monday 17th December 2007 Interbank
GB POUNDS / EURO  1.3994


UK Rightmove house prices again show a fall


Pounds:


UK house prices released this morning by Rightmove showed another fall which comes as no real surprise. Annual house price rises came in at up 4.8% for November falling from 7.9% on the previous reading. Given the elevated borrowing costs and fall in consumer confidence the fall in house prices looks likely to continue.

On Friday MPC member Kate Barker said that a weaker pound was good for UK manufacturers which accelerated the fall in cable which was already under pressure.

The house price data has ensured a sluggish start for the pound.

A busy week ahead for the UK with CPI, MPC minutes and Retail Sales all due out before Xmas. The only data release for today was Rightmove prices.


Euros:


The euro is once again under pressure following the rally by the US dollar setting off some fairly major stops. ECB member Klaus Liebscher didn’t really inspire a great deal of confidence by saying he was worried about the spike in consumer inflation and that ‘something had gone amiss’.

PMI data for the Eurozone is due out at 0900GMT and should show a small fall for the 3Q of 2007. No ECB speakers set for the day.


General Euro Currency News:


• The addition of liquidity announced last week in a tie-up between the Fed, SNB, ECB, MPC and BOC becomes available today.

• According to reports Goldman Sachs came out of the credit crunch nicely with 3 traders making a profit of something in the region of $2bn. This should keep banking stocks supported, if only briefly.

• Oil remained supported over the weekend with news that Turkey had carried out airstrikes on the PKK rebels in Northern Iraq, with allegations that the USA may have backed Turkey. Oil this morning is trading at $91.21.

 

Friday 14th December 2007 Interbank
GB POUNDS / EURO  1.3943


UK slowdown could be ’worst in MPC history'


Pounds:


The pound remained firm amid warnings that the economy could be facing the biggest slowdown in the history of the MPC. A BOE ‘agent’ said that the sharp slowdown would be caused by a considerable slowdown in consumer spending.

MPC member Paul Tucker said yesterday that current credit issues could lead to a ‘vicious downward spiral’ and the BOE needs to take steps to avoid this. He also said that current interest rates are ‘mildly restrictive’ which would probably see him as a voter in the cut camp when minutes are released next week.

Nothing to get concerned about in the UK markets in terms of data this morning with nothing set for release.

MPC’s Lomax is on the wires at the moment but as yet she has not said anything to move GB Pound.


Euros:


ECB member Juergen Stark said overnight that the rallying commodity prices pose a large and real risk to inflation in the Eurozone and that the ECB will act accordingly if inflation feeds through to the broader economy.

This morning German HICP was confirmed at a new all time high which will give the ECB some food for thought come the next meeting.


General Euro Currency News:


• Stock markets had another tough day yesterday with the FTSE posting an almost 3% drop.

• Japan’s Tankan survey showed sentiment down more than expected and the prospect of capital investment slowing down.

• Switzerland kept rates on hold yesterday.

• Oil ticked away yesterday following the sharp rally on Wednesday and poor stock market performance. Oil is now $92.67.

 

Thursday 13th December 2007 Interbank
GB POUNDS / EURO 1.3876


• UK house price balance lowest since 2005
• UK unemployment hits 32-year low


Pounds:


Yesterday UK jobless figures hit a 32-year low of 2.5% yesterday which will come as good news for the current government which could be described as under pressure. The pound rallied on the back of the data release but turned negative following the announcement of the liquidity additions by the central banks.

This morning RICS house price data came in at the worst levels since 2005. RICS reported that it saw ‘price falls across all regions in England and Wales’ and that price falls are becoming entrenched. RICS also said that with price expectations the lowest since monitoring began in 1998, surveyors expect prices to continue to fall.

As a consequence the pound has started trading on the back foot this morning and will be looking to MPC member Tucker who speaks this afternoon for support. No data today otherwise.


Euros:


The euro took support from the liquidity tie-up announced yesterday with news that the dollar injection would spur euro buying to shore up any holes in the books of banks.

In addition we keep hearing hawkish comments from central bank members which is keeping a firm bid on the euro. Euro-dollar is again above the key 1.47 level this morning too.

French and Italian CPI to look forward to today.


General Euro Currency News:


• According to Bank of America, Wachovia , PNC and Alan Greenspan the write-downs on investments in sub-prime mortgages are still yet to be revealed which is not good news for the global economy.

• Oil rallied sharply yesterday on the back of the liquidity addition with renewed confidence entering the market. Oil also gained support on the back of US inventory news with crude and gasoline stocks falling sharply which should see a pick-up in demand.

This morning oil is currently trading back above $90 at $93.89.

 

Wednesday 12th December 2007 Interbank
GB POUNDS / EURO 1.3911

Pound is taken to the cleaners on carry trade reversal
UK lenders come under fire for ‘irresponsible’ lending


Pounds:


Another decent day for the pound yesterday, that was up until mid-afternoon. The pound simply reversed and came under massive selling pressure. There was nothing explicit in terms of macro-data prompting the move and then it looks like the reasoning behind the move was massive selling in the GB Pounds /JP Yen cross, reversing some carry trades.

The pound has mounted a small recovery but is still a fair way from the levels it was trading at before the sell orders hit the market. Cable is above 2.04 and we are testing 1.39 on the euro at the moment.

Today in the UK we have employment and earnings data at 0930GMT and these are generally market movers.

Unemployment is set to stay the same as last month.


Euros:


A bit of pressure on the euro yesterday morning following a poor ZEW figure from Germany. The headline economic outlook figure was not only lower than previously but also came in under expectations. Analysts cited ‘clear risks for economic growth’ and the high level of the euro for the poor reading.

Today from Europe we have Industrial Production and Eurozone employment data all set for release midmorning and ECB member Papademos is expected to speak.


General Euro Currency News:


• The Citizens Advice Bureau yesterday attacked sub-prime lenders for ‘irresponsible’ action in lending mortgage loans to risky borrowers which has now seen repossessions and missed mortgage payments jump hugely in the climate of higher rates.

• Oil remained range bound yesterday with the US cut in interest rates failing to stimulate the stock markets. Oil is currently trading $89.39.

 

Tuesday 11th December 2007 Interbank
GB POUNDS / EURO 1.3904

UK output price inflation rises to 16 year high


Pounds:


The pound gained some support following last weeks pounding on the back of the MPC’s decision to cut rates by a quarter. The main driver for the move was the highest producer output inflation reading for 16 years. The figure was boosted by high oil prices and rapidly rising food prices according to the surveying body. Interestingly a National Statistics spokesperson confirmed that the MPC did NOT have access to this data prior to their rate decision last week.

The Times today carries a story expecting consumer credit costs to rise despite cuts in the base rate citing the lack of liquidity in the interbank market.


Euros:


A fairly quiet day for Europe yesterday with ECB comments pushing the euro marginally bid. Executive member of the ECB Liikanen said yesterday that there are short-term upward inflation pressures and upside risks to price stability. These sentiments were shared by another member, Juergen Stark.

The market today is looking to Germany for ZEW expectation data which is expected to dip lower for December.


General Euro Currency News:


• Chinese inflation jumped to 6.9% in November mainly on higher pork (yes, pork) prices, amongst other pressures. China’s central bank should respond to the inflation figures with tighter lending and a faster pace of currency appreciation in 2008.

• BOC’s Dodge said overnight that inflationary pressures had receded and now the economy faced downside inflationary pressures.

• Oil dipped yesterday along with base metals as Morgan Stanley predicted a mild recession for the US in 2008. Gold did rise sharply however. Oil is now $88.42.

 

Monday 10th December 2007 Interbank
GB POUNDS / EURO 1.3915

The Times: interest rate cut won’t be the last

Pounds:

Most of the UK press welcomed the decision by the MPC to cut interest rates by 0.25% last week looking at the Sunday and Monday papers. With growth, the house market and consumer confidence all looking fairly weak the attempt to inject some life into the economy has come as a welcome decision from most parts. However for some this move is not enough with some doom-merchants looking for at least 4% by 2009 citing growth as the major factor.

On the other side of the coin inflation remains a concern in the economy with oil prices where they are and food prices set to head higher. PPI this morning is set to rise again which won’t be welcomed by the MPC and will no doubt throw some doubt on the future course of rates.

Euros:

Not too much to report from the Eurozone on Friday following the ECB’s decision to keep rates on hold at 4.0%. Unattributed ECB comments this morning say the bank are ready to act on any second-round inflationary pressures which would seem slightly hasty given the position of other central banks around the world.

Today we have Industrial Production from member states excluding Germany which could potentially see the euro drop off if data falls away.

General Euro Currency News:

• The yuan has appreciated on the back of US Treasury Secretary Paulson‘s visit to the area. His visit should see talks held over the need for the yuan to appreciate in order to reverse the build up the trade deficit on massive export numbers.

• Swiss bank UBS announced a $10bn write down on sub-prime issues but secured large funding to strengthen capital.

• Oil prices remain steady with mixed news in the market. China just signed a $2bn deal with China however OPEC confirmed that production will not be raised. Oil is currently $87.63.

 

Friday 7th December 2007 Interbank
GB POUNDS / EURO 1.3847

Sterling loses on the back of BOE decision

Pounds:

Well the MPC decided to cut rates in an effort to stimulate a lagging economy. Quite why they decided to do this still puzzles given the rising inflationary pressures and increased LIBOR rates is still rather confusing however the 9 members deemed a cut beneficial to the economy.

The reasoning behind the cut was a slowing economy and a future fall in inflation however with house prices still showing an almost 7% year on year rise and inflation at 2.1% the move seems somewhat inconsistent with economic theory.

UK NIESR growth dropped to a year low yesterday falling from 0.7% to 0.6% on a month by month period.

No UK figures or speakers are set for today.

Euros:

The ECB kept rates on hold at 4% yesterday which was fully expected, the shock coming in the press conference where president Jean-Claude Trichet expressed the bank’s stance as very hawkish, mainly based on an anti-inflation policy. Rightly he saw a cut in rates as a short-term respite to the credit squeeze currently worrying the markets and merely acknowledged as much.

General Euro Currency News:

• South Africa raised interest rates by 0.5% to a huge 11% yesterday which saw a nice rally for the ZAR.

• The Japanese fundamental economy remains fairly unsurprising with the BOJ commenting that economic recover remains ‘on track’.

• Oil managed a rally yesterday with OPEC refusing to increase production in the face of high demand and resulting costs. Oil is now $90.19.

 

Thursday 6th December 2007 Interbank
GB POUNDS / EURO 1.3899

Breaking news The Bank of England cut interest rates from 5.75 to 5.5 per cent on Thursday as the majority of members on its monetary policy committee decided the risks of sharply slowing activity outweighed those of rising inflationary pressures

The pound has started to fall against all the majors including USD and Euro and is under “continued pressure”

MPC on a knife edge over interest rates today

Pounds:
Two words: not good. With the MPC decision being too close to call very poor housing data yesterday sparked a huge sell off of the pound on the FX markets.

Surprisingly weak Halifax house price data showed prices dropped 1.1% month-on-month. This caused futures markets to price in a cut for today with the housing and consumer sectors the most vociferous. The overnight index now has a chance of almost 75% of a cut.

On the other side of this it is worth noting that the remit of the MPC is to hit the inflation target of 2% and currently inflation is at 2.1% with upside pressures most notably from oil.
The rate announcement comes at midday today and the market is certain to be volatile in the run up to the decision.

Euro:
The euro and the ECB have been very quiet of late in the run up to the rate decision today. The central bank are fully expected to leave rates on hold at 4.50% at lunchtime today. What will be interesting is the press conference after the announcement in which Trichet will be grilled about liquidity pressures in the Eurozone and what the ECB intends to do about it.

The announcement is at 1245 GMT and the press conference at 1330 GMT.

General News:
• The RBNZ left the interest rates in NZ at 8.25% as expected with Governor Bollard commenting that current rates are consistent with inflation target however there are signs that it will accelerate.

• The Times MPC is calling for a rate cut for the first time in 2 years with a 7-2 vote in favour of a cut in the UK market.

• Oil remained very stable with inventories proving to be uneventful and the stock markets doing very Little. Oil is $86.83 this morning.
 

Wednesday 5th December 2007 Interbank
GB POUNDS / EURO 1.3884

UK Nationwide Consumer Confidence posts record fall

Pounds:
The pound came under pressure yesterday ahead of the MPC meeting today and tomorrow with a fairly large move downwards against the euro.

Not much in the way of macro-drivers yesterday however the negativity looked to be on the back of carry trading and general sentiment.

Overnight Nationwide Consumer Confidence fell by a record amount on a month-on-month basis. All of the sub-indices fell for November with just 10% thinking it was a good time to make a major purchase. The FSA have also warned smaller mortgage lenders they may be in for a rough time with up to 1.4m homeowners facing a sharp jump in repayments.

Northern Rock could be nationalised should a deal with private investors fall through.

UK BRC shop prices and CIPS survey this morning.

Euro:
A very good day for the euro yesterday even without strong data. Heavy demand through carry trading forced the euro higher and this was supported once euro-dollar broke through 1.47 out of the 24-hour trading range.

The French who are fairly unhappy with current euro levels yesterday said that the differential between EU and US interest rates needs to be reduced and that better coordination is needed in the currency market.

European Retail Sales are forecast to dip sharply when released at 1000GMT.

General News:
• The Bank of Canada surprised markets yesterday slightly by cutting rates by 0.25%. US Dollar Canadian Dollar eventually broke back through parity following the recent CAD appreciation.

• The RBA did indeed leave rates on hold at 6.75% last night.

• Two former MPC members are calling for a December rate cut in the UK. Both Buiter and Wadhwani are calling for the bank to cut by 0.25%.

• Oil seems to be in a holding pattern with inventories this afternoon and very little in the way of geopolitical events moving the market. Oil is now $88.43.

Tuesday 4th December 2007 Interbank
GB POUNDS / EURO 1.4090

Credit squeeze begins to tighten grip on property funds

Pounds:
Yesterday PMI manufacturing surprised to the upside against expectations yesterday which saw the pound post some decent gains on FX markets. Any data that could be considered as bullish should see the pound gain in value ahead of the MPC decision this week.

Overnight BRC Retail Sales came in lower than expected, although they were stronger than the October reading.
The overriding feeling is that consumers are now tightening purse strings ahead of next year and may opt for a price-controlled Xmas period.

The general consensus for the MPC is that they will keep rates on hold this month however there still remains plenty of uncertainty over the decision. A close vote should be expected.

No data today.

Euro:
Not too much to report from Europe yesterday with no ECB speakers and very little data through the market.

Overnight the German Finance Minister Steinbrueck said that pressure for euro appreciation could well continue and that at the moment we are seeing a disorderly unwinding around month-end. This would appear to be very bullish for the euro however if the ECB disagree then these comments would be pretty irrelevant.

European PPI is set to rise when released at 1000GMT this morning.

General News:
• The Bank of Canada are balanced between cutting rates today and leaving them on hold at 4.5%. Given the depreciation in the CAD recently a cut would seem the least likely decision.

• The RBA should leave rates on hold at 6.75% tonight.

• Property based funds have tightened up their purse strings by enforcing longer redemption periods following credit squeezes and falling share prices of property-based entities.

• Oil remains fairly static after an unspectacular day on the stock markets and ahead of US inventory data released tomorrow. Oil is currently $89.54.

Monday 3rd December 2007 Interbank
GB POUNDS / EURO 1.4020

Sunday Times: MPC urged to cut rates

Pounds:
The pound could be considered to be fairly stable given what could happen this week and the generally gloomy press from the weekend. Two leading economists called for an immediate rate cut to end the problems and confidence issues currently surrounding the debt-laden UK economy. Perhaps slightly ambitiously one called for a 0.75% cut this week.

Despite this bank to bank lending rates hit 6.6% last week and inflation issues remain a concern which have prompted most analysts to forecast a no-change at the meeting this week. Saying this there is a probability of 40% that the MPC will cut rates.

Nothing of great importance today with UK manufacturing the headline figure.

Euro:
The ECB retains its hawkish stance in the face of potentially slowing growth on the back of German data which could be a serious problem in the coming months. Inflation in Europe remains a problem however figures last week from Europe’s strongman showed that growth could be turning. This could be potentially damaging for the UK with almost two-thirds of all trade with Europe.
PMI manufacturing today could pose a problem for the ECB who are expected to hold rates this week.

General News:
• This week the RBA are set to keep rates on hold until at least the first quarter of 2008 with ongoing global fluctuations making any decisions very difficult.

• The BOC may opt to cut rates this week which would add further pressure to the CAD following fairly heavy weakness based on trade against the US DOLLARS.
.
• Oil continues to dip following last weeks failure to print $100. This week Middle Eastern producers may opt to up production which would see further weakness in prices. This morning oil is $89.63.
 

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