Fund Performance per day (inception date: 04 Dec 06) : 2.59935%

Today

Market Bias - USD viewed as undervalued by FX Markets

AUD (Forecast is neutral) - The current account deficit narrowed by less than expected in the September quarter 2006 to $12.1 billion (market median: $11.0 billion). The narrowing of the current account was due to the decrease in the trade deficit, which was due to stronger imports. However, exports is expected to pick up after the drought has lifted in mid 2007. The drought toegther with high fuel prices also sent the services sector index down.

USD - (Neutral ahead of ISM data) Traders will be focusing on the ISM Non Manufacturing Data before going long on the GBP and EUR.

JPY - (Bullish) The yen is at its four month highs against the dollar and recouping much of its recent losses against the euro, on speculation that the Japanese central bank could raise interest rates again soon. The currency's gains came after Bank of Japan board member Atsushi Mizuno was cited by Reuters as saying that there is no need to wait until all economic indicators are strong before raising interest rates again.

EUR - Cable and the euro were unable to benefit from news of stronger-than-expected services sector PMI surveys out of the UK and the euro zone. The news was offset, however, by a very disappointing retail sales survey from the British Retail Consortium released overnight. ECB is scheduled to announce its latest interest rate decision on Thursday, with a quarter point rise in its key rate to 3.50 pct fully expected. Market players will therefore be looking to the accompanying press conference for any indications on the interest rate outlook going into next year.

Later

2100h - CAD : BoC Rate Decision

2200h - USD : ISM Non Manufacturing

0700h - GBP : Nationwide consumer confidence

0730h - AUD : GBP YoY and MoM

Technicals

USD/JPY - Short at 114.20