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Here is a collection of Forex News Updates, Other Forex Trading System Resources and Information.This morning in the UK, CPI figures came in as expected with the headline number coming in at 3.1%, down .1% from the previous month.  While this is still outside of the target range, the BOE is hoping for a gradual fall that will allow them to leave monetary policy unchanged.  The BOE has a [...]


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This morning in the UK, CPI figures came in as expected with the headline number coming in at 3.1%, down .1% from the previous month.  While this is still outside of the target range, the BOE is hoping for a gradual fall that will allow them to leave monetary policy unchanged.  The BOE has a dual mandate to keep inflation in check and encourage employment.

Here in the US, our own PPI figures came in as expected as well, with the headline number coming in showing the first increase in nearly 4 months.  Prices increased .2% for the month vs. last month’s decline of .5%, showing that deflationary forces may be protracted—at least for now.

In the Euro zone mixed readings of economic sentiment came in, with German investor confidence weakening more than expected to a 16-month low of 14 vs. an expectation of 20.  However, the current situation survey increased to 44.3 vs. an expectation of a gain to 24.  All in all this shows a positive outlook for the German economy, as reflected in the German stock markets gains this morning.

In Australia, minutes from the RBA’s rate policy meeting show that they are “comfortable” with current interest rates and are prepared to see if the heightened concerns over the global economic uncertainty are warranted.

In the forex market:

Aussie (AUD):   The Aussie is mostly higher this morning as the resumption of risk appetite has returned to the market.  While the RBA minutes did not provide evidence that a further rate hike may be coming, they will be keeping an eye on potential inflation which they expect to be tame as global concerns increase.

Kiwi (NZD):   The Kiwi is higher on risk appetite, as the docket for news for NZ is light this week.   PPI figures and consumer confidence figures are due out later this week.

Loonie (CAD):   The Loonie is higher across the board as manufacturing shipments increased .1% vs. an expectation of a decline of .5%, providing a lift to the business outlook.  In addition, oil prices are higher this morning to 76, and the Loonie has been beaten up as of late because of Canada’s close ties to the US economy.

Euro (EUR):  The Euro is higher this morning as its current account deficit showed a surplus of 1.0B vs. last month’s deficit of 17.9B.  In addition, mixed confidence figures from Germany are seen as largely positive, as an improved outlook for the EU economy is likely.  However, don’t expect the ECB to move on rates any time soon, as there is still sovereign debt risk aplenty.  Borrowing costs in Spain and Ireland decreased as concerns over their budgets have decreased.

Pound (GBP):   The Pound is mostly lower despite risk appetite this morning, as CPI data came in as expected at 3.1%.  While inflation is still currently above the government target of 3%, the BOE is hoping that prices will fall, allowing them to keep accommodative policy in place.

Dollar (USD):   The Dollar is lower as would be expected under a “normal” risk-taking scenario this morning.  Building Permits and Housing starts came in lower than expected, while PPI data showed a gain of .2% meeting expectations.  In addition, a conference on housing is taking place which will mostly produce no solution to the problems that plague the housing market.  Two of the biggest problems, both Fannie Mae and Freddie Mac, escaped mention in the Financial Regulation bill, drawing the ire of those who believe that these entities were the cause of the housing debacle.

Yen (JPY):  The Yen is weaker against all but the Pound, as risk appetite is encouraging carry trades.  However, as the Yen hovers near 15-year highs vs. the Dollar, expect the intervention talk to heat up.

So the numbers here in the US still look weak, but they were not horrible.  PPI increases for the first time in 4 months show that prices may be stabilizing which will keep the deflationistas at bay for another day.

In the UK, in-line CPI data means that the BOE most likely has time with its current monetary policy to play out, as the Pound bulls were hoping for a higher CPI reading which would most likely cause speculation of a return to normalized policy increase.  Tomorrow, the minutes from the rate policy meeting will be released, and it will be interesting to see if any sentiment has changed as inflation has remained above the government target for the third quarter in a row.

The Euro zone appears to be stabilizing as well, as budget concerns in the countries with debt problems have subsided, and the German economy still appears to be rocking.

The commodity currencies will continue to trade on risk themes, as near-term rate hikes are most likely out of the question.  The “wait and see” approach appears to be the course that they will follow.

And lastly, speculation over Japanese intervention in the Yen will heat up with any further Yen appreciation.  Risk aversion will most likely be the driver as carry trades are unwound—but will the BOJ succumb to government pressure?

Stay tuned!

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