EUR/USD

Alan Greenspan`s comments have shown that the US trade deficit has become hard to be financed and this can cause damage to the USD and makes it less attractive but it is not a crisis yet. He has added that the intervention impact will be moderate BUT he`s hinted that the pace of tightening can be faster than the market was discounting has helped the USD at the end of last week and at the beginning of this week which is expected to see a light trading. It is expected to see weak IFO figure this month following the recent dovish ZEW which has shown a sluggish industrial growth in Germany.


USD/CHF

After the omitting of the stability in the currency market from the G20`s statement, it became clear that the USD is tolerated to go down further and instead of that they have asked for more flexibility in the currency market which can be read as a request for reevaluating the Yuan and reducing the Japanese intervention and this statement can put further weights on the USD, in spite of the pledges of tightening the twin US deficits and following a strong dollar policy!

GBP/USD

GBP is still lagging behind the other European currencies in their advance against USD on the recent housing prices easing which have been slowed to -.4%. The BOE quarterly inflation report has shown concerns on the consuming sector in UK that there can be no more rate hike by the end of this year and
this current dovish sentiment on the interest rate outlook can put weights on GBP across the broad generally and makes it at least lagging behind the EUR. The quarterly CBI Trends survey is what can be waited from UK this week.


USD/JPY

Iwata`s recent talking about the flexibility that has been reached in the currency market and his agreement on the moderate impact of the interventions with Greenspan has dragged the pair from 130.3 to 102.7 last Friday. That is beside the G20 call for a flexible currency market. The market is waiting later this week for Sep All Industry Index from Japan and it is important to watch Oct US durable goods orders this Wednesday.

Best Wishes
FX consultant
Walid Salah El din
http://www.fx-recommends.com
Cairo, Egypt.