MARKET REPORT MONDAY 11TH AUGUST 2008

 
Good Morning,

Last week saw the strongest week for the US Dollar since 2004 with Friday being the strongest day since 2001, and over the course of the week the Euro traded against the Dollar from a high of 1.56 to a low of 1.4967 following warnings from the ECB on Thursday that the European economy is facing a sharp downturn. Sterling also lost a lot of ground against the Dollar trading from a high of 1.9835 to a low of 1.9169 reflecting an unprecedented level of volatility in recent summer currency markets.

The support for the US Dollar was also caused by oil prices plunging below $115 a barrel, reducing inflation concerns and improving prospects for consumer and business spending. The sentiment now is generally for oil prices to move lower, however, due to ongoing political tensions between Russia and Georgia , the risk is certainly skewed to the upside in the near term.

In the euro zone this week, the most important data releases are due on Thursday when markets await the flash GDP estimates and a fall of 0.2% is expected by analysts.

In the US , the most important data release, due later this week will be the Retail sales figures.

Michael Ince

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