Fundamental Headlines
• Banks Assess Financial Hit – Wall Street Journal
• Concerns Over China, ECB Hit Euro – Wall Street Journal
• Fed Official Warns of Asset Risk - Financial Times
• Greeks Stage Nationwide Strike to Protest Overhaul of Pensions, Labor Laws - Bloomberg
• Tropical Storm Alex Strengthens in Gulf as Center Issues Hurricane Warning - Bloomberg
EUR/USD: The final reading for consumer confidence in the 16 member euro area remained unchanged for the month of June, while the economic sentiment index advanced to 98.7 from 98.4 in May. Meanwhile, business confidence remained unchanged at -6 in June from the previous month. Going forward, sentiment will likely be tested as rising unemployment and ballooning budget deficits will surely remain in the spotlight. Indeed, the lifeline line worth nearly $1 trillion has done very little to calm market fears as government bonds continue their northern journey. Looking ahead, investors are weighing in a zero percent chance that the central bank will raise borrowing costs twenty five basis points at its next rate decision meeting, next week on July 8th, according to the Credit Suisse Overnight index swaps. To discuss this and other topics, please visit the EUR/USD forum.
GBPUSD: Consumer credit in the U.K. rose 0.3B in June after falling 0.1B the previous month, while the annualized rate was flat for the month. Meanwhile, lenders in the region granted 49,815 loans to buy homes. However, it is noteworthy that mortgage approvals were unchanged from the revision the month prior and was shy of economists’ expectations of 51.0K. Today’s figures show that the recovery in the Britain’s residential property market is weakening as house prices remained subdued. Consumer credit is also likely to remain constrained in the near future on the back of high unemployment, and uncertainty in the global markets, while recent plans such as the increase in the value added tax proposed by the Chancellor of the Exchequer are likely to create additional headwinds for consumers going forward. To discuss this and other topics, please visit the GBP/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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