Fundamental Headlines
• Currency Trading Hits $4 Trillion a Day – Wall Street Journal
• Yen Rally Loses Stream – Wall Street Journal
• Investors Seek to Forget Dire August - Financial Times
• Weber to Discuss Next Sarrazin Move as Merkel Condemns Immigration Remarks- Bloomberg
• China Manufacturing Rebound Eases Concern Slowdown in Economy Is Deepening – Bloomberg
EUR/USD: Retail sales in Europe’s largest economy unexpectedly fell 0.3 percent in July from the month prior, while the annualized rate disappointed, rising a mere 0.8 percent after climbing 4.7 percent the previous month. Retail sales will likely remain subdued for the rest of the year as household spending scales back amid uncertainty in the euro-zone’s outlook as governments are expected to implement tough austerity measures. At the same time, I do not rule out a loss in earnings, which is not protected by the short term working scheme in the region. Also worth noting well be the weakening in the export market in Germany, which the country thrives off of as its neighbors battle high budget deficits. Meanwhile, the final PMI manufacturing for the 16 member euro was revised higher to 55.1 from 55.0 the previous reading, but was lower than July’s figures of 56.7.
GBP/USD: U.K. PMI Manufacturing in August tumbled to 54.3 from a revised 56.9 in July amid economists’ expectations of 57.0, the Markit Economics said today. The drop in today’s report marks the lowest level since November 2009. Taking a look at the currency markets, the GBPUSD has halted its two day decline, but price action looks to remain capped by the 200-day SMA. The pair may face downside risks towards 1.5291, with a break below exposing 1.5234.
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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