London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Oct 07 08 12:23 GMT |

The buck reasserted itself once again in London trading, moving higher against most of the majors. Poor data across the pond helped matters as it suggests that the deterioration in European economies continues unabated. UK industrial production came in at an awful -0.6% for August, on the heels of an already paltry -0.4% the prior month. This dealt a blow to the pound and GBP/USD plunged more than -100 pips into the 1.7420 mark. The data in the Euro-zone was no better as German industrial production -- while up in the month of August -- fell to an annual rate of -7.6% after running near -0.3% previously. This is the weakest run-rate since late 2001. EUR/USD was broadly unchanged however, sitting near the 1.3570/80 zone at the close. The pair basically drifted as the market awaits comments from Fed Chairman Bernanke at 1715GMT today. Bernanke is due to speak on the economy and markets and traders anticipate he will offer up whether the Fed is contemplating rate cuts or not. We would expect the USD to trade lower if Bernanke hints that rate cuts are coming. This could see a reversal later in the week, however, if his European counterparts step up the rate cut rhetoric as well, as this could negate any impact to the buck from a rate differential standpoint. Stay tuned! Upcoming Economic Data Releases (NY Session) Prior Estimate 10/7/2008 13:30 GMT GE ECB's Trichet Speaks in Evian, France 10/7/2008 15:00 GMT US Fed's Stern Speaks in Chicago on Financial Shock 10/7/2008 17:15 GMT US Bernanke Speaks on Economy, Markets in Washington 10/7/2008 18:00 GMT US Minutes of Sept. 16 FOMC Meeting 10/7/2008 19:00 GMT US Consumer Credit AUG $4.6B $5.8B 10/7/2008 21:00 GMT US ABC Consumer Confidence 5-Oct -41 - - 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.