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Tuesday, June 17, 2008 Morning Update

The FTSE is currently indicating a lower open, as traders are awaiting the release of the Bank of England minutes from its last meeting. After seeing any hopes for a rate cut dashed yesterday, everyone will be interested to see if there is any indication of a rate hike for the next meeting. While a rate hike would be welcomed by the GBP/USD, it would be a punch in the gut to the FTSE, which already has been dealing with record oil prices and a squeeze in the credit markets.

Oil continues its losing way, bringing the count to four consecutive trading days. The main culprit is the slow down in economic growth, which translates into lower demand for the black gold. Helping push the price lower is the rumoured increase in output by the worlds largest oil producer Saudi Arabia. There may be a glut of oil in US, as slowing demand and increasing output will result in a fall for the price per barrel.