The greenback is still holding its recent gains across the broad with no major change on the market attention to the negative impact of the US growth slow down negative impact on UK and EU. We wait this week for important data starting with tomorrow release of the US ISM manufacturing index of August which is expected to be 49.9 from 50 in July and by the end of the week, we have the release of the US non-farm payroll which is expected to be -73k from -51k in July.

The single currency suffering has exacerbated last weak by the surprising slump of the germane IFO business climate index which reached 94.8 in August from 97.5 in July and also today release of the EU August manufacturing PMI which has come in the same direction lower than 50 level in the contracting territory at 47.6. Also we wait later this week for the EU services PMI release and its flash release has already come at 48.2 previously showing increased worries about the growth outlook in the Eurozone which might shrink this year. The market sentiment is still also negatively impacted by these weak data from EU and geopolitical concerns which can increase in the euro area after the recent confession of Abkhazia and southern Austia by Russia. The tension between Russia and the NATO can increase in the future. The single currency could not find strong footing yet. Technically closing last week lower than 1.481 was a dovish sign and recording a new low last week after the weak IFO release could put further weights on the pair to make a new low with the beginning of this week at 1.4571.

This weekend comments of the Chancellor of the Exchequer Darling that the growth conditions in UK might be at the worst conditions in last 60 years could contain the current market sentiment pushing the cable lower than 1.80 in today's trading and it is now trading just above it amid further weak housing data have shown decline of the UK mortgage approvals reached 33k in July which is the weakest figure since 1993. even June figure has revised down to 35k from 36k. The cable can be under a continued strong preassure waiting for interest rate cut can come later this week to stimulate the current suffering growth.

Best wishes

FX Consultant

Walid Salah El Din

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