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Euro follows sterling down, crude volatility picks up

26.08.08

In this week's review, we examine another currency to have fallen steeply against the dollar, the euro, and assess where this important relationship is headed next. We also comment on an increase in volatility in the crude oil market, and the reasons behind this change in action.

Last week we assessed the bearish outlook for sterling, which continues to fall away against the dollar, with a full scale sterling crisis looking on the cards this autumn.

The action in the crude oil markets has been fascinating for the last couple of weeks, with some fairly chunky movements suggesting a potential short term low. Whilst the business press has been focusing on the path of various hurricanes (Gustav is building up in the Gulf of Mexico as we write), trouble in Ossetia and the state of the US driving season amongst many inputs, what we have seen recently has reflected different and more important factors.

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