Dollar continues to follow a volatile path this week and yesterday was no exception. Early trade was somewhat subdued as the market waited for data from the US and key earnings reports from JP Morgan Chase and movements followed recent momentum with the dollar slackening somewhat against its GBP and EUR crosses.

The data was however wholly dollar supportive. US housing starts were 106k better than expected although looking behind the figures analysts believe this to be nothing more than a surge due to new and tighter building regulations being enacted than a recovery of the housing market at large.

JP Morgan Chase followed Wachovia’s lead yesterday and posted numbers the markets liked. Profit in Q2 was shown to be $2bn, a 53% drop from a year ago, but still higher than the rather pessimistic forecasts that the banking analysts had put forward. These 2 pieces of relatively bullish data added some steel to the wobbly dollar and cable retraced back down to the 2.00 level.

Data today is fairly inconsequential and forex markets will look to equity, commodity and debt markets for a head nod.

Have a good weekend.

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 Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our:Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.   

Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.