As the East coast of the US geared up for hurricane Sandy,
investors appeared to be preparing in the same vain. Yesterday saw the dollar
gain against many of its peers, whilst the currencies perceived riskier saw
losses.

A second day of closure at the NYSE today was expected to
show dollar strength, a condition amplified by the disparity in opinions
between Greek leaders and euro ministers; however an early morning rally in
European stock markets enabled confidence in the region.

As the East coast of the US geared up for hurricane Sandy,
investors appeared to be preparing in the same vain. Yesterday saw the dollar
gain against many of its peers, whilst the currencies perceived riskier saw
losses.

A second day of closure at the NYSE today was expected to
show dollar strength, a condition amplified by the disparity in opinions
between Greek leaders and euro ministers; however an early morning rally in
European stock markets enabled confidence in the region.

German Finance Minister Wolfgang Schaeuble rebuffed Greek
hopes of a debt restructuring deal, whilst frustration over Spain’s reluctance
to apply for a bailout is showed signs that the safety-net promise of the ECB’s
bond buying scheme was tempering.

The day’s main loser was surprisingly the pound. Despite the
positive GDP data from the UK last week, investors took a pessimistic view that
the economy will fall back as the effects of the Olympics fade away, causing
losses against most of its counterparts.

ECB president Mario Draghi speaks today, whilst Spanish GDP
data, German unemployment and Italian bond sales will all be important
announcements. Any surprise positive news could see euro strength. Whilst
overnight the Bank of Japan announced further stimulus of 11tn yen, a move that
was deemed insufficient as investors wanted more to boost the ailing economy.

Key Announcements Today:

• 05.46am – JPY – Monetary Policy Statement
• 09.00am – EUR – Spanish GDP q/q: contracts by 0.3% slightly
  better than expectations
• 09.00am – EUR – ECB President Mario Draghi Speaks
• 09.55am – EUR – German Unemployment Change: expected increase
  by 10k
• Tentative – EUR – Italian 10y Bond Yield
• 12.00pm – GBP – CBI Realised Sales: expected increase