The main focus this past week was the reassessment of the global recovery along with the impact of a rise in the US interest rate. The recent string of US data was below expectations. Em-ployment data increased to only half of what was forecasted.

Average earning rose by a negligible 0.1% while hours worked fell. Manufacturing was a poor employer and approximately 11k people lost their jobs.

Factory orders fell in May to more than what was initially forecasted, leading the analysts to believe that the economy did not pick up enough momentum to demand another increase in rates.

Most currency analysts expected the Fed to be more aggressive in tightening monetary policy as that would enhance the lure for dollar based assets.

The Fed decision to raise interest rates on Wednesday by 25 basis points showed that the optimism about the US economy was “measured’’ and expectation was that the dollar would be back on its foot in the latter part of the session.

On Monday, in late afternoon trade in New York, the euro traded at US$ 1.2314, which was up to 1.3 percent, after touching a 3-1/2 week high at US$ 1.2327.

To the Japanese yen, the greenback fell to 108.14, before rallying to 108.35 yen.

Against the Mauritian rupee, the dollar was offered yesterday at 28.45 against 28.40 a week earlier.

The Sterling bounced back against the euro on Tuesday, and hit a two weeks high against the dollar on Monday.

This is mostly due to the expectation that the interest rates in the U.K would rise more quickly than elsewhere. The service sector industry growth in the UK fell slightly but the prices charged to customer in-creased to compensate for the fall in growth.

The bank of England is expected to hold the interest rates at the existing level after its monthly policy meeting last Thurs-day but would tighten policy again in August.

The Bank of England had already increase rates four times since last November.

The pound rose to its highest since June $1.8364 before paring gains to stand at $1.8328 in late London trade.

Against the Mauritian rupee, the Sterling was offered yesterday at 52.15 against 51.88 a week earlier.

The euro is heading higher. The next step will be for the euro to hit the $1.2350 range approximating the high in June. The euro benefited from expectation of a monetary tightening in the euro-zone and concerns about the impact of rising oil prices on the U.S economy.

Against the Mauritian rupee, the euro was offered yesterday at 34.99 against 34.54 a week earlier.

<B>Major events-data</B>

<B>Wednesday 07 </B>

US Mortgage Refg

US Redbook

<B>Thursday 08 </B>

GB BoE rate

US Jobless Claims

<B>Friday 09 </B>

GB Trade Bal’ce

Monday 12

GB PPI

<B>Tuesday 13 </B>

US Redbook