Mixed news for the dollar yesterday, as strong PPI data arrived showing finished prices are up almost ten percent on year, at the fastest pace in over 25 years. This dollar index rose to its highest level since January as continued selloff in commodities markets again added strength in early trading.  Equity selloffs dampened momentum as investors remain fearful amid further poor news from Fannie Mae & Freddie Mac, and this saw dollar lose strength in late trading against major crosses. Housing starts also fell to 965K for the month of July.

The German ZEW result arrived out at a lot more positive than forecast, and this provided some energy for the Euro in afternoons trading, reversing some of the recent damage inflicted by the dollar and further punishing the hapless pound

Early this morning trading remained steady as traders brace themselves for the all important Bank of England minutes from the last policy meeting, where consensus is on another three way split. As if this isn’t enough action for the UK, this afternoon also features the UK CBI trends

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