Fundamental Headlines
• Another Japanese Leader Quits as Recession Looms – Wall Street Journal
• Hedge Funds Are Caught in a Tight Spot – Wall Street Journal
• Retail Investors in US Equities Hits Low – Financial Times
• U.K. Suspends Homebuyer Tax in Moves to Reverse Slump – Bloomberg
• Russell 200 Tops S&P500 for Fourth Month on Dollar, Bank Gain – Bloomberg
· EURUSD – Euro-Zone producer price spiked to a fresh record high of 9.0% as crude oil prices peaked to $147.27 a barrel in July. Despite hitting a new high, the release failed to meet expectations of a rise to 9.1%. The increase was driven primarily by record high commodity prices as crude oil peaked to $147.27 a barrel in July. Commodity prices have fallen from their record high in recent weeks, and should help to ease price inflation throughout the 15 European nations. For more news and resources, visit our EUR/USD Forum.
· USDCHF - Headline inflation for Switzerland crossed the wires weaker than expected, with consumer prices easing to 2.9% from a 15 year high of 3.1%. A separate report showed that Swiss GDP was much weaker than expected, falling to 2.3% from 3.0% in the first quarter. Robust export demands from Asia and Eastern Europe has helped to support economic growth in the second quarter, but this may no longer be the case as demands from the US and Euro-Zone continue to slow. Fading demands from the global economy may limit growth outlook for the SNB, and may pressure the central bank to lower the benchmark interest from a six year high as inflationary pressures ease. For more news and resources, visit our Swiss Franc Currency Room.
· AUDUSD – The Reserve Bank of Australia reduced their benchmark interest rate to 7.00% from a 12 year high of 7.25%. A weakening labor market paired with stagnant growth has pushed the central bank to lower the interest rate for the first time since 2001. The RBA expects economic activity to remain subdued over the coming months, and said that there is “scope for credit conditions to become less restrictive.” Meanwhile, inflation continues to hold above the RBA’s comfort level, but the central bank expects inflation to fall back below 3% during 2010. For more news and resources, visit our Australian Dollar Currency Room.
