The Current Market Sentiment

by FX Recommends Author : Walid Salah El Din
8/6/2007

Carry trade unwinding containing the current market sentiment. The belief that the recent high yield currency run was excessive could support the Japanese currency versus the single currency and the pound amid The decline of the stock market in US and this mistrust wave which is looking persisting and prolonged not like what's happened earlier this year after Greenspan's comments concerning the bubble in the Chinese market as this time it is underpinned by the problem of the sub-prime market in US and the fear to be spread into other sectors and the crediting market generally as what's happened after last Friday Bear Sterns executive said that credit markets in the US were at their worst in 22 years At any case the greenback is still depressed by the same problem and the expectations of that the worse has not come yet and there can be a prolonged negative impact on the US economy and the crediting stability in US. We need to wait this week for UK quarterly inflation report as a clue to the interest rate outlook in UK and the pound as well. It is important to know more about the MPC stance after Trichet's recent comments that it is strongly vigilant currently which is widely indicating another hike at its coming meeting next month. Comments waited till the release of US non-farm payroll to start to be bought by the market and taking effect pushing the EUR above 1.38 and it looks nearer this time to 1.4 Best wishes

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