Daily Forex Fundamentals | Written by DailyFX | Aug 05 08 11:31 GMT |
Fundamental Headlines
AUDUSD - Australia's central bank employed dovish rhetoric by holding the benchmark interest rate at 7.25 percent. Governor Glenn Stevens said, 'With demand cooling…a less restrictive stance of monetary policy in the period ahead is increasing.' Indeed, after having advanced the overnight cash rate four times in the past twelve months, slowed economic growth has cooled inflation. In wake of this news, the Australian dollar fell to a three-month low, after traders speculated the RBA will cut rates next month.
GBPUSD - Manufacturing and industrial output showed falls during June, causing investors to bet second quarter gross domestic product could be revised down. Manufacturing fell by 0.5 percent, while production fell by 0.2 percent. The quarterly figures for both indices mark the biggest falls since the first quarter of 2005. Accordingly, the data further suggests that the U.K. economy is slowing, with economists expecting GDP to drop by 0.06 points in the next estimate.
EURUSD - Business activity declined to a 7-year low, with the Euro-Zone Purchasing Managers' Index dropping to 47.9 points. The level below 50 indicates contraction. Only Germany reported an increase in activity in July, but the increase was still less than forecasted. Retail sales also declined, showing a 0.6 percent drop. These signs of economic slow down suggest that the ECB will keep rates on hold when they meet on Thursday.
- BP Venture in Russia Hit as CFP Steps Down (link) - Wall Street Journal
- Price Increases Ramp Up, Sounding Inflation Alarm (link) - Wall Street Journal
- Oil Falls as Fears for Growth Intensify (link) - Financial Times
- Bernanke May Sound Tougher on Inflation to Avert Fed Rebellion (link) - Bloomberg
- Northern Rock Gets 3 Billion-Pound British Government Injection (link) - Bloomberg
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