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Here is a collection of Forex News Updates, Other Forex Trading System Resources and Information.This morning the British pound is higher as a better than expected employment report showed that the unemployment rate hit a 15-month low as jobless claims fell for a fifth month in a row. This, combined with earlier CPI data that was higher than the BOE target rate, further strengthens


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This morning the British pound is higher as a better than expected employment report showed that the unemployment rate hit a 15-month low as jobless claims fell for a fifth month in a row. This, combined with earlier CPI data that was higher than the BOE target rate, further strengthens the argument for a return to normalized monetary policy.

In the Euro zone, CPI data showed that inflation has slowed to 1.4%, largely meeting analyst expectations. Separately, industrial production figures weakened to 9.4% from an expectation of 11.4%.

In New Zealand, the Kiwi is under pressure as retail sales came in less than expected and house sales fell the most in almost 18 months.

In the US, equity futures are higher as corporate earnings keep moving forward lead by an outstanding report from Intel. However, US retail sales figures are due out shortly and that could change the market sentiment. The expectation is for a decline of .2%.

So this morning is a bit of a mixed bag and can be described as neither risk taking nor risk aversion. There is Yen and Dollar strength, so perhaps the retail sales figure is the number that will bring things “back in line”.

Also to note is that tomorrow China will report its GDP figures which could have an effect on Pac Rim currencies.

In the forex market:

Aussie (AUD): The Aussie is lower as the government revised its growth projections lower to 3% from 3.25%. However, consumer confidence figures jumped 11.1%, the highest gain in over a year.

Kiwi (NZD): The Kiwi is lower as weaker than expected retail and home sales show signs that the economy may be slowing and that potential rate hikes may not be necessary. Most economists are predicting a 25 bp rate hike at the July 29th rate policy meeting, but economic data such as this may bring about a pause.

Loonie (CAD): The Loonie is lower this morning as oil prices have retreated below the level. Next week is Canada’s rate policy meeting and there is tempered optimism that a rate hike may be coming.

Euro (EUR): The Euro is lower as European stocks sold off on news that industrial production figures were lower than expected. In addition, CPI data showed prices declining and there was a report showing that Spanish banks borrowed more from the ECB than expected. All that said, one would expect the Euro to be trading lower but right now it is mixed showing resiliency.

Pound (GBP): The pound is higher across the board as jobless claims fell more than expected. If the economy keeps humming along, then perhaps inflation may not fall back into the BOE comfort zone of under 3% and this could cause the BOE to not only normalize rate policy, but also possibly raise rates.

Dollar (USD): The Dollar was showing some earlier strength but is giving back gains as the equity market futures are still higher despite a worse than expected retail sales figures. Retail sales came in at -.5% vs. an expectation of -.2%. However, with unemployment levels as high as they are, this really shouldn’t come as a surprise to anyone. Corporate profits are higher (due in a large part to layoffs) and money needs to go somewhere.

Yen (JPY): The Yen also started the morning off higher as a result of the Euro news, but is giving back some gains as the market appears poised to take on some risk. The BOJ is set to meet tomorrow and there is some speculation that they may hold off on easing monetary policy this time, preferring to wait until the dust settles from the Euro bank stress tests.

Because at one point the US consumer represented some two-thirds of US GDP (I’m curious to see where this figure is today), retail sales figures are an important metric. However, with massive unemployment and an increased reason to save, we may not be counting on the consumer as much to drive growth.

So who is behind the growth? Well, the answer is the US government. And this is one of the fundamental differences between big government proponents and those who oppose it.

In any event, it looks like the negative retails sales news may be out-weighing the positive earnings figures as risk aversion is picking up.

Until the US government decides to pursue pro-business policies, businesses will not be hiring and the government will be forced to pick up the slack by spending more thereby increasing deficits and kicking the can down the road.

While this may not seem like a problem to some, consider that if government spending replaces retail spending, then they will decide how resources get allocated and not individuals. And folks, that ain’t democracy.

I’ll let you decide what type of government that is.

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