Weekly Outlook: Hunting the Weaker

In my view, recent depreciation of dollar, especially on Friday, doesn't reflect any particular strength in most of other currencies. Investors preferred to buy more gold as a safe heaven when the level of risks rose significantly in response to IndyMac crisis, Fannie and Freddie troubles, and increased tensions in Iran's nuclear program.

US: Everyday in the last week had something to increase pressure on the greenback. Even an unexpected narrower Trade Deficit on Friday had almost nothing for the dollar; poor dollar!

Euro zone: GDP revised lower, industrial production contracted in Germany and France, German exports turned negative when trade surplus narrowed, all show signs of weakness in an economy that must face even more burden from recent increase in interest rates.

UK: Economy looks generally weak in Europe and the Britain is not an exception. Industrial production shrieked 0.8 percent in May and consumer confidence dropped in June to 63 from 69. It is just when the MPC find it more difficult to restore balance between fighting increasingly rising inflation and promoting economic growth.

Having that background and looking at this week's calendar, I think every day has its own victim; dollar in one day, euro in another.

(to be completed)