Currencies
The euro and yen did not revive - rather the U.S. dollar fell as weak data pushed the expected economic recovery out further into next year. And this was despite equally weak news from Europe and Asia. The dollar fell for a fourth week against the euro after the National Association of Purchasing Management index showed that the U.S. services sector had declined in July. Other recent reports have dampened investors' optimism that the U.S. would rebound in the second half of the year. Analysts are still waiting for the Fed's six interest rate cuts to kick start the economy even though looser monetary policy can take anywhere to a year or longer to filter through the economy.

The yen lost ground immediately after last week's election results were known while the Nikkei sank to a 16 year low. The yen regained strength as the Nikkei rose 3.7 percent on the week. Investors are understandably nervous over the precarious state of the economy and about reforms to be pushed by Prime Minister Koizumi, now that he helped win a victory for the LDP in the upper house of the Japanese parliament. Investors are still awaiting details.

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