FX Closing Comments

The Dollar kept its head above water for another day, with the Dollar Index ending the day up 48 ticks. The most recent commitment of traders report showed that big speculators took 2000 long Euro contracts off the table last week, implying some improvement, in terms of Dollar sentiment. Rising unit labor costs have also increased the odds of additional rate support, which contributed to the Dollar's strong posture this week. There is a lot of UK data next week, which could potentially shake the Pound out of recent bout of softness. Also, at the end of next week, will be a G7 meeting. Although nothing substantial is expected in terms of Chinese Yuan revaluation, rumors are likely to be floating around and making markets jittery.