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Posted by fxrecommends@gmail.com on July 29, 2008, 6:14 pm
The greenback could harvest the inherited gloomy growth outlook
picture in EU and UK from US. The market is waiting this week for EU
PMI manufacturing and service data and there is expectation of a close
reversing above 50 yet. The IFO data has shown that the germane
business climate is struggling. This mistrust sentiment of the single
currency is negative for the EURUSD which faced a strong resistance to
stand back above 1.575 again forming another lower high at 1.575 after
1.5935 and 1.6023.
Also today's new low records of the UK mortgage approvals at 36k plus
the -36 of the UK retail sales CBI could give enough pressure on the
cable to sink below 1.991 with no expectation of a new MPC split
decision as the serious needs of consuming currently or even if there
is a vote for hiking in the face of inflation, it is hard to have a
majority to hike interest rate amid the current decline of the
commodity and oil prices which trading for the second week below 130$
a barrel.
From another side the greenback and the US stock market could
capitalize the decline of the commodities and oil prices recently
making rally after yesterday Merrill lynch write down bad news. It is
right that the housing sector outlook is still blur but the equity
market has managed to gain trust from this decline of oil prices and
the US financial quarterly earning reports which have given the market
the sentiment that the credit crisis is easing and there can be no
worse than what has been done because of the housing market slump
after last summer US sub-prime mortgages bad loans problems which
dragged the home prices down and caused worries about growth and an
ease of the interest rate to 2% from 5.25%. in spite of the recent
Minneapolis Fed President Stern saying that the worst has yet to pass
and the credit crunch impact can continue into next year.
Best wishes
FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com
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