Daily Insight

Trichet's comments on Thursday continued to pressure the Euro through the end of last week.

More importantly, Friday's jobs report showed a strong wage growth component, further fueling fears over inflation, and giving the dollar a good excuse to continue its rally. We have now broken the 1.1868 level (July lows), making a new low for 2005. The last time we traded down here was in April 2004. The long term implication is that the dollar may be finding its feet after a four year bear market.

Economists are eyeing the US Trade Deficit with increasing concern. Alan Greenspan has warned of "serious economic disruptions" if the deficit cannot be brought under control in the medium term. The September deficit is released on Thursday.

GBP EUR - Support 1.4755 then 1.4720
Resistance 1.4830 then 1.4870

GBP USD - Support 1.7450 then 1.7420, 1.7388
Resistance 1.7525 then 1.7585, 1.7705

DATA: UK Industrial Production 09:30
German Industrial Production 11:00
US Consumer Credit 20:00