Spot Forex: Latest Headlines
Posted 7/30/2010 5:18:00 AM [EMU DATA - GOLDILOCKS ECONOMY?] Just released EMU data points to a
goldilocks economy where neither inflation or deflation threaten & the
jobless rate is steady, consolidating overall and follows this week's
upbeat, forward looking EMU indicators/cons conf. The euro area [FLASH
CPI] (for Jul) has come in at 1.7% y/y vs 1.7% f/c and up from 1.4% in
Jun, dispelling fears of some deflationary chatter & staying comfortably
within the ECB's 2% target. The weak Euro (in late Q2) probably caused
most of the rise, but with inflation seen remaining between 1%-2% for
several months, perhaps quarters, the ECB is seen sitting tight with its
loose policy for a good while yet. Eurostat also said that the [EMU
UNEMPLOYMENT RATE] (for Jun) held steady at 10% vs 10% f/c and therefore
has remained unchanged since reaching double digits in Mar (9.9% at start
of 2010). A modest data reaction, Bunds +5 ticks, Euribor 1-2 ticks up.
09:05 GMT - The [SWISS FRANC] so unloved at the beginning of this week, has
roared back with a vengeance in the last two days. Rumours of an early
Chf rate hike and talk that the SNB was selling Eur/Chf started the
rebound yesterday, but talk from the Fed's Bullard overnight warning of
the heightened risk of deflation has seen investors scurry back into the
safe haven currencies. Usd/Chf now sits at its lowest level since
January. The market must now be incredibly short of Dollars, a scenario
which I'm sure will be borne out in the CFTC data later today, so look our
for short squeezes along the way. Technically though a weekly close below
1.0391 in Usd/Chf would be an extremely bearish signal. For now support
lies in the 1.0355 area Copyright © 2010, Informa Global Markets
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