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Amazingly the teeth of spinner dolphins have facilitated commerce in parts of the Solomon Islands for centuries and recently the value has risen from 4p to 18p as more people flock to it as a safe haven. Since 1977 the Solomon Island Dollar was the main currency but after a period of fin trading the Dolphin tooth has come back to the fore as a tradable currency….it is an interesting concept which comprises centuries of tradition with a modern desire for a safe haven and a connection to local tradition….money may run out but Dolphin teeth will always be there…that is unless man hunts the Dolphin to extinction…

Last Friday because of holiday and other commitments we had our lowest attendance in the office for Dress Down Friday. This did not deter anyone from getting involved and contributing and we managed to raise on the day …… huge drum roll…… £180.90.

How fantastic is that! For the 3rd week running we have broken our own record – and in the last Friday of the month to boot! I am so proud, and I can’t wait to tell The Food Chain the good news. Really WELL DONE TO EVERYONE!

As is now becoming routine there was more than one way to contribute – Phil did another Rate Watch, GBP against USD, which wasn’t won this week as no-one was within his strict rule of 10 pips, which means it’s a rollover next week! I want to make a special mention to Hulya, the winner of last weeks Rate Watch as she donated her winnings to the cause this week, thank you Hulya you’ve set a great example!

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It has a feeling of crunch time for the ECB as Thursdays rate decision approaches…the pressure is certainly mounting for the ECB to not only cut interest rates but to introduce additional measures to revive the economies in the euro zone. Today we have already seen two data snaps that will pile the pressure on the ECB; Euro zone inflation has hit a record low in March dropping to 0.6% from 1.2% in Feb- a sharper fall than expected. Unemployment in Germany rose to 8.6% in March from 8.5% in Feb; unemployment is on the rise throughout Europe with the Spanish jobless now over 14%. In addition the Irish credit rating has been cut by S&P from AAA to AA+ with the possibility of further downgrading on the cards. So will the ECB still not commit to aggressive action? Joerg Kraemer, Commerzbanks chief economist last week predicted that the German economy could contract by up to 7%…Trichet has strongly hinted that rates will be cut but also noted that low rates have “drawbacks” and are not appropriate for Europe…a bold statement given that Spain is showing deflationary signals and in the light of today’s euro zone inflation data….

Overnight the US dollar has lost ground against the pound and the euro- the dollar failed to break through key support against the euro in the 1.31 area- a weaker day in equities yesterday helped the USD to firm- later today we see consumer confidence data from the US.

The Yen has come under pressure in recent sessions with dreadful economic data and sentiment undermining the Yen as a safe have currency. Jobless rates in Japan have risen to a 3 year high and February’s exports halved- it is also anticipated that business confidence data released overnight will slump to a 30 year low.

Lots on the agenda this week; the main focus will be the G20 summit, ECB rate decision and US non farm payroll data. The G20 summit will take place in London amid difficult economic times and a call for a unified response to the economic downturn. Many argue that the summit will be a huge disappointment and anti-climax with rhetoric not mobilizing into action; on the other hand it is an opportunity to regulate global finance and show a unified response to the economic downturn.

On Thursday we see the ECB rate policy meeting with the expectation of a 50 basis point cut; again the main focus will be on Trichet’s comments after the decision, the key aspect being whether he will opt for unconventional measures and further easing… Vice-President Papademos commented last week that the central bank may decide to buy corporate bonds. If any escalation in this regard then look for a sharp sell off in the euro.

Looking at the fx markets we have seen the pound weaken against the USD back under 1.42 as Weaker GDP and a higher current account deficit than forecast put the pound under pressure. The US dollar has also gained significantly against the euro as it recovers its poise from last weeks sharp sell off- one driver for a stronger dollar is the expectation that the USD will remain as the worlds main reserve currency for some time to come. On Friday, look for key data in relation to US non-farm payrolls which may show a fall 700,000 in February- this would be the largest drop since the 834,000 decline in October 1949.

More weak data from the UK this morning as official figures confirmed that GDP contracted by 1.6% against the estimate of 1.5%; this follows weak sentiment from the CBI and weak retail sales data released yesterday. Sterling has dipped this morning against the EUR and the USD and has even slipped a little against the YEN, historic economic data on the UK economy is still of concern and reflective on sterling; this is contrary to the US where the market is focusing on more forward looking projections rather than historic data. It seems the US is currently in buoyant mood despite yesterdays posting of GDP at the weakest for 26 years and jobless rolls at a record high.

Tim Geithner yesterday announced a raft of measures to sure up the financial sector and prevent similar problems occurring again in the future; his measures included ensuring large firms being required to hold larger quantities of capital in the good times to support themselves in the bad times- common sense you would think but the cold facts of the recent past paint another story. There will also be a single body to regulate financial institutions with a similar remit to the FSA in the UK- there will be a strong focus on financial stability. Equities have continued to perform well globally following the Feds plan to mop up toxic debt and this has led to volatility in the FX markets. The main trends experienced in the last week showed a move out of low yielding currencies such as the US dollar and the YEN and Sterling into higher yielding currencies such as the NZD, AUD and ZAR- the NZD climbed to a 10 week high against the USD.

We have a big week next week with interest rate meetings for the Bank Of England and the European central Bank (ECB) and the G20 meeting kicking off at Excel in London. It will be very interesting to see how the ECB move on interest rates and if they discuss the introduction of added measures to help the economies in the euro zone…

The USd has gained against the euro back through 1.35 and is currently testing 1.34. With the ECB rate decision next week a move back to 1.30 could be on the cards…