U.K. GDP Falls, ECB Liebscher Says Room For Rate Hike

Daily Forex Fundamentals | Written by DailyFX | Jul 25 08 10:49 GMT |

Fundamental Headlines GBPUSD - U.K. economic growth slowed to 1.6% year-over-year from 2.3% in the first quarter, which was the slowest pace since 2001. Gross domestic product rose 0.2% in the three months through June, as the housing slump and fall out from the subprime crisis saw construction, manufacturing and financial services fall. The economy is steadily approaching a recession as overall production fell 0.5% in the second quarter. Slow growth and rising inflation is expected to leave the BoE on Hold. EURUSD - German import prices rose 8.9% in June on the back of higher energy costs. It was the fastest pace in more than seven years and surpassed economist predictions of 8.4%. Meanwhile, the M3 money supply in July fell to 9.5% from 10.4% due to slowing growth. As growth declines the ECB will be hard pressed to raise rate sfurther. USDJPY- Japanese inflation rose to 2.0% in May after a 1.3% increase the month prior, on soaring gas and food prices. The higher costs are curbing consumer and business spending is impacting growth. Although prices are near the higher end of the BoJ's target band, the central bank will most likely leave rates unchanged as the country heads towards a recession. Amid Turmoil, U.S. Turns Away from Decades of Deregulation (link) - Wall Street Journal Banks Sink Regional Stocks (link) - Wall Street Journal Dutch Fund Charged Over Oil Price Abuse (link) - Financial Times Munich Re Drops Most in Five Years After Cutting 2008 Forecast (link) - Bloomberg Liebscher Says ECB Has Room to Raise Interest Rates (link) - Bloomberg DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.