Portfolio Performance : +9.4%

Actions : Long EUR/USD

Headline News

1. Alocoa lead Dow industrial decliners yesterday, on track for lowest close in 7 months
2. A substantial portion of banks say they have tightened lending standards for commercial and industrial loans, residential real estatem and consumer loans over the last three months, but fewer banks expect to tighten lending standards on these loans over the next year, according to a July Federal survey of Senior Loan Officers
3. Japan's July corporate goods price index higher by 7.1% year on year
4. A key measure of Australian business conditions hit its lowest level in seven years in July as firms reported falling sales and profitability, adding to the case for an urgent cut in official rates
5. China CPI higher by 6.3% year on year
6. Citigroup says that slower economic growth and higher product prices are expected to cut into Chinese oil demand in the second half of the year
7. Japan's revised June industrial output lower by 2.2%
8. Japan's July consumer confidence index down at 31.4 from 32.6 in June
9. New Zealand house prices were flat in July, while the number of sales bounced off 16 year lows, a survey showed on Tuesday. Sales is higher by 4.3% from June but lower by 32.6% from a year ago
10. Indonesian consumer confidence rose in July after falling for eight straight months, indicating that less respondents expressed pessimism about current economic conditions and the economic outlook for Indonesia
11. Russia's central bank said that the military conflict with Georgia over South Ossentia will lead to short term capital outflow from Russia, but should not have a big economic impact (is he kidding?)
12. French current account deficit -4.4 billion Euros vs Revised -2.8 Billion Euros
13. The South Korean won fell against the dollar on Tuesday as the US currency rose on mounting worries about a slowing global economy and was further pressured by importer's dollar demand for settlements
14. Russia says that they will reduce thier investments in US agency debt, driven by political pressure and the holdings may further be reduced
15. IEA says that Georgia conflict threatens energy hub, but the agency warned that it was too soon to say that the tide of the recent long surge of oil prices had finally turned, signalling that the softer conditions were likely to last into 2009 (I dont think so)
16. Saudi BinLaden Group to invest in Indonesia
17. The US trade deficit in June unexpectedly improved as US goods and services exports increased faster than imports, according to the US Commerce Department

My expectation for the US crosses

1. EUR : Positive
2. AUD : Negative
3. GBP : Negative
4. CAD : Positive
5. JPY : Negative
6. CHF : Neutral

Bottomline : The US dollar strength has decreased, but I continue to think that the equity market is still bullish which might put the US dollar in a positive light still