QuoteDislikedGBP/USD Net Short -12,843 from Net Short -31,248 the Week of Jun 17
The GBP/USD gains this week were in part propelled by the large GBP short
positions which last week were the largest since End Nov 2005. Shorts have been
sharply pared which could stymie attempts by GPB/USD to break above 2.0000.
Another Interesting I read at DailyFX:
QuoteDisliked06:33 US Official Dollar Jawboning Came After Saudi "Hints"- UK Times Sydney, June 29: Irwin Stelzer writing in the UK Sunday Times said that reliable sources indicated that when US Treasury Secretary Paulson visited Saudi Arabia in May it was to soothe "ruffled feathers" in the Saudi royal family over the decline of the value of US Treasury bonds due to the falling US dollar. The Saudis are large buyers of US Treasuries and are needed to support the ongoing federal budget deficits. According to the report the Saudis "hinted" that if the US wanted more oil it should do something to shore up the US dollar.
According to Stelzar, Paulson brought that message back, got President George Bush and Vice-President Dick Cheney to agree, and started talking up the dollar. Stelzar says that "perhaps not so independently" the Fed chimed in and indicated that interest rate cuts were no longer on the cards and Bernanke surprised by mentioning the weak US dollar as posing a problem in capping inflation. Thus it was no coincidence that the Saudis followed by announcing several increases in oil production.
The markets went on to price in Fed rate hikes if for no other reason to keep the US dollar stable and help cap the oil price rise. According to Stelzer, some of the Fed officials and NY Fed President Geithner in particular feared that the rate hike talk would threaten the stability of the US banking system and "pressed for an end to all this talk of raising interest rates." The US dollar has weakened over the past two week and the FX market did not like the "dovish" FOMC statement. The EUR/USD is nearing the upper end of recent ranges and some are now looking for a return to 1.60 or higher for the EUR/USD. Stelzar says that the "ball is back in Paulson"s court" and he now must decide whether or not his commitment to the Saudis requires direct intervention in the FX market to buy US dollars. If Stelzar"s information is accurate, it will be very interesting to see how all of this plays out if the EUR/USD is approaching 1.60 by the end of the coming week. [email protected]
So the market was dissapointed with FED being dovish, USD went down, OIL went up, GOLD went up etc.
....Noooooo 
, damn, 
.. see you guys when london open, later
