Market Report

IT'S ALL A LOAD OF BOLLARDS

Yesterday we saw the USD increase in strength as investors cover there short Dollars position. The main rush was caused by Dr Alan Bollard the RBNZ Governor acknowledging the pain that New Zealand exporters are experiencing with the strong currency, Mr Alan Bollard tried to talk down the currency saying that it was overvalued. The Kiwi Dollar steamed rolled like the "All Blacks" rugby teams catch and drive against GBP yesterday moving 1.5%.

An interesting day for GBP is ahead and an extremely nervous weekend for our London football teams. Yesterday after Paul Tuckers from the Bank of England speech seem to given the impression that they was not phased by the inflation level and expected it to fall back to the 2% level and that there was not going to be a flurry of interest rate hikes.

On the football front should the "Hammers" get a result at Wigan and the "Gunners" shoot down Fulham on Sunday it will be tense time for all concerned.

Also this afternoon for all you Talk Sport fans The Breakfast show with Alan Brazil are playing against Ian Wrights Drive time show in a five aside match ex-pro featuring are Andy Townsend, Ray Houghton, Jason Cundy and Gary Stevens at 1.00pm. This is for radio pride and should be a laugh to listen to.

Have a great day and a cracking weekend going to be a hot one apparently!

DH

The dollar continues to sit in a precarious position just like my colleagues beloved football teams. There seems to be a vast amount of uncertainty on what the BANK of ENGLAND will do on the 10th of May regarding their interest rates decision. I think that 25 Basis Points have already been worked into various currency rates but should they move the interest rates by 50 Basis Points then we will see some movement. If I was a betting man I would have a flutter on 25BP only with further hikes later in the year and Charlton to go down.

Yesterday the Aussie's smashed the South Africans in their semi final of the Cricket World Cup, but that is a roll reversal when it comes to currencies. The ZAR has been rallying in recent days and we expect it to continue today ahead of there local holidays tomorrow and Tuesday next week when we will see some consolidation. Sticking with the Southern Hemisphere the Kiwi's moved the interest rates up to 7.75%. The RBNZ decided to raise rates at its Official Cash Rate (OCR) to a record high since its adoption as the primary policy instrument back in March 1999.

DH

Today there is very little in the way of economic data. The highlights being the UK CBI industrial survey at 11:00 and US existing home sales at 15:00 with neither expected to have a huge impact on the FX markets.

There is also little in the way of major sports news to report on this morning, but there is a very big Champions league game tonight where Manchester United are playing AC Milan. Any football fan knows how big a game this is.

I hope the day ahead brings more excitement than this report!

DE

Inflation was the theme for last as we saw inflation in the UK go above 3%. This meant that Mervyn King of the Bank of England had to write a letter to the Chancellor Gordon Brown explaining why inflation had risen to that level. We already believed that interest rates were going to be increased by a quarter of a percent, but this latest news has put the thought of a half a percent increase in some people's minds.

Last night saw N Sarkozy and S Royal go through to the second round of voting in the French presidential elections, which will be held in two weeks time.

There is little in the way of economic data today, but later in the week we see some important data from the US.

There is too much sport to talk about, but I will concentrate on the race for the Premiership title. I think Chelsea have blown their chance as they failed to capitalize on Man Utd drawing at home to Middlesborough.

Have a good week.

DE

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