London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Sep 10 08 12:24 GMT |

The buck gained ground against most of the majors once again in London trading as the European Commission cut its growth forecast for 2008 down to 1.3% from 1.7% and this negated the positive impact from better than expected French industrial production numbers. ECB President Trichet came out with typical hawkish comments saying that he expects inflation to “remain high for some time”. Luxembourg Finance Minister Juncker offered a more somber assessment though, noting the “risk of a technical recession”' in Europe and that the euro remains “overvalued”.

EUR/USD dipped about -45 pips in the session towards a close near the 1.4095 mark. GBP/USD meanwhile slipped about -70 pips towards the 1.7565 area. USD/CAD remained relatively lofty, adding a modest 15 pips towards 1.0690, as oil prices remain under pressure to take out $100/bbl. USD/JPY was taken lower once again on the shaky performance of global equity markets. Bad earnings news from a major US investment bank this morning is likely to keep US stocks depressed and pressure JPY crosses further.

No major economic data out today but oil inventory data will likely be closely watched at 1435GMT. The forecasts are for huge draws for the week ended September 5th as Hurricane Gustav struck the Gulf. Better than expected results are likely to see oil test $100 in earnest. The focus is likely to be on equities and specifically the financial sector. Watch for JPY crosses to react with some volatile moves.

Upcoming Economic Data Releases (NY Session) Prior Estimate

9/10 12:30 CA Labor Productivity QoQ 2Q -0.30% 0.30%

Forex.com
http://www.forex.com

DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.