FX Market Overview

Yesterday’s main news veered away from financial matters and centred on U turns in government as contentious bills and plans are scrapped in the run up to an inevitable election.
Chameleons will be in great demand today because there are two focal points for traders. The European Central Bank will make its interest rate declaration today. No change is envisaged and it would be rather unwise for the ECB to change anything while its own members are privately voicing concerns over the exposure that the EU has to eastern European economic problems. However, their press conference is at 12.30 GMT and that will be far more interesting as we may get a feel for whether we are actually at the bottom of the interest rate cycle as far as the ECB is concerned.
But, and this is where the chameleons will come in handy, the US authorities release the June employment report at 12.30 GMT as well. This is probably more important as it is likely to reflect a slight improvement in the job prospects for US citizens and that may well create a flow of funds from US Treasury markets and into the likes of the Australian and New Zealand Dollars as Investors seek higher yielding but perhaps slightly more risky investments. Now all you need is a translator who speaks English and Chameleon and you are laughing.
The Dollar has started today in a stronger footing after China brushed off talk of moving away from the US Dollar as a reserve currency. That has been a topic of conversation for weeks but until a viable alternative is secured or perhaps when the Chinese Yuan becomes more freely tradable, this status quo will remain.
Sterling, ion the other hand is weaker this morning as it retreats from the highs seen earlier in the week. Poor economic growth numbers and fears over the levels of debt the government is having to service as well as the undoubted nervousness about an election that is coming soon are all weighing on the Pound.
And two reports hit the newswires this morning; official crime figures show Britain is more violent than South Africa, Europe or America and a report commissioned by the Howard league says we have too many people in jail. Maybe there is a link. What do you think?
And finally, speaking as a chap who was born and bred in Surrey, I was delighted to read that the best kissers come from my home county, as voted for in a poll on a dating site. I am not dating I hasten to add before my wife reads this.