Spot Forex: Latest Headlines
Posted 7/30/2010 2:38:00 AM [UK DOUBLE DIP ALERT] Despite only a week since the ONS shocked
markets with the strongest quarterly growth for 3 years (Q2 1.1%), the
prospect of a double-dip is on the up according to fresh consumer
confidence data. As mentioned before, the GfK NOP fell for a 5th month in
a row (to -22) - posting its lowest reading since Aug 2009. The weak
reading follows this week's BoE/MPC TSC testimony which was pretty candid
where risks lie - with the probability of a slowdown very much the base
line view. GfK director Moon was adamant that the continuing slide in the
index makes a double-dip more of a possibility as each month passes (per
Telegraph) with the GFK one of the better forward looking indicators since
the budget. BoE's Dale also recently warned the UK is heading for a
triple whammy of high inflation, low growth & high unemployment so next
week's PMIs could be a wake up call & relegate Q2 GDP as a distant memory.
06:23 GMT - [USD/JPY] hit a new low for 2010 overnight of 86.25. The fall from
European closing levels of 87.12 has come despite some disappointing Japan
data releases, i.e. IP (-1.5% m/m), PMI, unemployment and of course the
obligatory negative CPI numbers. Japan Fin Min Noda said the admin is
watching FX markets closely, but perhaps a green light to continued Yen
strength was given by a DPJ panel official who said a strong Jpy should be
dealt with not by intervention but monetary easing. We know the Dollar
weights currently and Fed's Bullard added to that mix by talking of the
possible need for more QE in the future, while the IMF voiced concerns on
the US financial system (may need Usd 44.6bln in capital). With US GDP
ahead, we do not expect sentiment to turn here any time soon. Offers
expected to emerge into 87.00, with next bear and barrier target at 86.00.
06:17 GMT - [MOODY'S] warns [SPAIN]'s rating could be lowered, although it is
unlikely to follow in Greek footsteps & may only be downgraded 'a bit' Copyright © 2010, Informa Global Markets
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