The currencies market is still trading in a mixed way in a very tight range since the end of last week with no major change of the market sentiment.

The single currency is still struggling to stand over 1.43 after better than expected data came from the Euro zone last month started the release of EU GDP of the second quarter which came at just -.1% q/q and -4.6%y/y and it was expected to be -.6% q/q and -5.1% and it has continued with the uprising release of the germane ZEW of August which was expected to go up to 45 from 39.5 in July it has surprised the market this morning by rising to 56.1 this month and also August ZEW survey of the EU which shows the economic sentiment has gone up to 54.1 from 39.5 in July and it was expected to be just 43 and by the end of last week we have had better than expected flash figures of EU PMI Manufacturing of this month coming up to 47.9 from 46.3 in July and it was expected to improve to just 47.5

and also the PMI Services figure came up to 50.2 from 47 and it was expected to be 48.1 and also in the beginning of this week, we have seen an increasing of the EU industrial new orders in June by 3.1% m/m and they were expected to be up by 1.7% and ended with the optimistic Germane IFO release of August this morning which was expected to be 88.6 and it has surprised the market by 90.5. The IFO expectations have gone up to 95 in August from just 90.4 in July and it was expected to be just 91.6 while the current conditions figure has increased to 86.1 but the single currency is still facing a selling pressure on touching 1.435 versus the greenback which has found some support from some getting back of the investors risk appetite to buy further stocks at these current prices after a strong rally in the equities market started from 9th of March when the Dow was trading below 6600 and it is still trying a week ago to break above 9600 up by 3000 points with the improving of the market sentiment and the economic conditions after the crisis came down as we have seen today the US ISM manufacturing index coming above 50 finally in August reaching 52.9 which is the highest figure since June 2007 reflecting an increasing of the demand which is waited to move the up the growth again. We have seen today too a continuous improving of the housing market conditions as the US pending home sales of July coming up by 3.2% after rising of the US new home sales of July too by 9.6% m/m which shows that there is a new demand growing in a faster pace than expected but the question now is it reliable enough to move the economy up in a sustainable way as Ben Bernenke has hinted recently when he indicated that the worst of the credit crisis is looking behind of us currently and the focusing is now on the current obstacles in front of a reliable economic growth after the credit crisis.

Best wishes

FX Consultant

Walid Salah El Din

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