Fundamental Headlines
• G-20 Agrees to Cut Government Debt – Wall Street Journal
• Mortgages Face New Rules – Wall Street Journal
• G20 Backs Drive for Crackdown on Banks - Financial Times
• G-20 Aims to Boost Confidence Amid Europe Crisis With Budget – Cutting Goals - Bloomberg
• Dollar’s Biggest Rally Since ’05 Buckles as Strategists Draw Line at $1.20 - Bloomberg
EUR/USD: The broadest measure of money supply for the 16 member euro area contracted an annualized 0.2 percent in May after falling a revised 0.2 percent the month prior. At the same time, economists were expecting the reading to advance 0.3 percent during the month, the European Central Bank in Frankfurt announced today. In depth, today’s figures show that banks are discouraged from lending to households as employment in the first quarter remained unchanged after falling 0.2 percent in the previous three months through December. Going forward, ballooning budget deficits is likely to cause an increase in borrowing. Meanwhile, we may see the euro zone face another downturn as governments scale bank stimulus measures to battle boiling deficits. This is turn has led market participants to weigh in a zero percent chance that the central bank will raise rates twenty five basis points at its next rate decision meeting on July 8th. To discuss this and other topics, please visit the EUR/USD forum.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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