MORNING BRIEFING: The Euro reached a nine month high against the US Dollar at 1.4447

[RTFX-Trading]

MORNING BRIEFING: The Euro reached a nine month high against the US Dollar at 1.4447

What’s new?
United States: Goldman Sachs increases its forecast for US economic growth
United States: ISM services index below expectations in July, at 46.4
United States: Surprise increase in factory orders in June
United States: 371'000 jobs lost in the private sector in July
Euro zone: Unexpected drop in retail sales in June
United Kingdom: Largest increase in industrial production since October 2007
Euro zone: Service sector continues to show improvement in July

Today:
10h00 Germany: Factory Orders June, exp +0.80%, previous +4.40%.
13h00 United Kingdom: BoE Monetary Policy Decision, exp unchanged at 0.50%.
13h45 Euro zone: ECB Monetary Policy Decision, exp unchanged at 1.00%.
14h30 United States: Weekly Jobless Claims, exp 580'000, previous 584'000
14h30 Euro zone: ECB President Jean-Claude Trichet press conference
 
Overnight Rates and Indices:
EURUSD: 1.4431 – 1.4386.
USDCHF: 1.0630 – 1.0603.
GBPUSD: 1.7031 – 1-6958.
EURJPY: 137.38 – 136.59.
USDJPY: 95.22 – 94.77.
DowJones: 9'280 -0.42%.
NASDAQ: 1’993 -0.91%.
S&P 500: 1’002 -0.29%.
Nikkei: 10'422 +1.65%.
Gold: $962.45.
Crude Oil: $71.32.
 
Comments:

The US dollar lost ground after Goldman Sachs raised its forecast for economic growth in the United States. The bank is now predicting a 3% growth in GDP in the 2nd half of 2009. The Euro yesterday reached a nine month high at 1.4447 against the Dollar, which had previously gained from the first contraction of the stronger than expected US services sector and higher than expected employment losses in the private sector in the United States.

Today, investors expect monetary policy decisions from the Bank of England at 13:00 CET and the European Central Bank at 13:45 CET. A status quo is expected, with rate remaining at 0.50% and 1.00% respectively.

From the press conference of the ECB at 14:30 CET, investors will look for any signal for changes in future plans for both conventional and unconventional measures. We believe in a more moderate than expected mood, which should weigh on EURUSD. Regarding the Bank of England, there is no press conference scheduled, but a report will be published just after the announcement, the BoE should keep their "wait and see" approach about the size of the QE (Quantitative Easing).

Good Day

Emman Xuereb
RTFX Ltd
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